EY has released its Renewable Energy Country Attractiveness Indices (RECAI) which found Australia has moved three spots to rank in the top 10.

The global report ranks Australia at number 10, up from 13 in the last rankings in September 2015, and notes that Australia’s renewable energy sector is racing to supply the Renewable Energy Target (RET).

However the report notes that state-level tenders and corporate off-take potential is driving activity, with few long-term power purchase agreements yet to come to market.

EY Oceania Power and Utilities Leader Matt Rennie said the “mismatch” between the three to five year PPA terms being offered and the 15 year terms that developers can bank, is holding back a “mountain of global cash” looking for alternative energy infrastructure investments.

“It is difficult to comprehend the sheer volume of global pension fund money that needs to be invested in energy infrastructure, and particularly non-conventional energy,” Mr Rennie said.

“The market is extremely competitive because of pressure to deploy capital and limited opportunities globally. We’ve seen this in the results of renewable energy tenders in Mexico, India and Dubai over the past few months, with prices of between US$29/MWh and US$40/MWh respectively for solar projects, and rising multiples for renewable assets globally.

“This investor appetite for renewable energy projects puts Australian energy retailers in the box seat.”

The EY RECAI report notes that the March 2016 signing of a 15-year PPA by major retailer Origin Energy for the 56MW Moree Solar Farm, has been seen as a landmark deal with hopes it will spur more long-term contracts.

Additionally, various state government-related procurement initiatives have provided liquidity in PPAs, and an Australian corporate PPA market looks likely to develop in the footsteps of similar markets in the US and Europe.

“There are signs that the investment gap caused by a PPA void is closing, with many funding sources being brought to market – last week’s 13-year PPA by Origin Energy for the 100MWh Clare Solar Farm is a reflection of that,” Mr Rennie said.

“The race to meet the current RET is now driving deals, but ultimately longer-term policy certainty will be required to drive long-term growth in the renewable energy in Australia, and that is what the sector will be looking for following the upcoming Federal election, regardless of who is in power.”

Renewable energy deals accounted for 50 per cent of transaction volume in the power and utilities sector globally in 2015, generating US$68billion.

The top three ranked countries in EY’s latest RECAI report remain unchanged, with the United States, China and India taking out the top three spots.

Jessica Dickers is an experienced journalist, editor and content creator who is currently the Editor of Utility’s sister publication, Infrastructure. With a strong writing background, Jessica has experience in journalism, editing, print production, content marketing, event program creation, PR and editorial management. Her favourite part of her role as editor is collaborating with the sector to put together the best industry-leading content for the audience.

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