China and India to top renewables investment league – E&Y

London, 10 May: China and India's greenhouse gas emissions may be soaring, but by 2012 they will also be the most attractive countries for renewable energy investors, according to consultancy Ernst & Young.

China has climbed three places to fifth in the 'long-term' wind energy section of Ernst & Young's renewable energy country attractiveness index. The index considers national renewable energy markets, renewable energy infrastructures and countries' suitability for individual technologies.

"The Chinese government is showing a commitment to renewable energy sources. Its investment in renewable energy is increasing at an impressive rate, with the annual installation of wind turbines more than doubling in the last 18 months," said Jonathan Johns, head of renewable energy at Ernst & Young, in the UK.

Large projects and good site availability are factors driving the rapid expansion, which could mean China achieves its 2010 target to install 5GW of wind capacity a year or two early, Johns said.

As last quarter, the US topped both the near- and long-term wind indexes, with Span and India coming second and third.

In the all-renewables index – which includes wind, solar, biomass and other resources – Ernst & Young puts the US in first place, with India and Spain tied in second and Germany a close fourth.

India's renewable energy sector is expecting a boost this year from forthcoming government budgets, which will provide tax exemptions on wind turbine production. This is in addition to recent legislation on compulsory renewable obligations, which have stimulated growth in renewable energy investment across the whole country, he said.

The UK slipped from fourth to fifth and "has not been as successful as it could have been in harvesting [renewable] energy", Johns said. The forthcoming review on banding of the country's incentive scheme for renewables will be critical to the UK's position, he said.

Five new countries have joined the index for the first time. Poland, Brazil, Japan, New Zealand and Turkey are becoming attractive to investors, Johns said.