by Taras Berezowsky
The consultancy that has undergone a post-Colonel Sanders-ification of its name, EY (formerly known as Ernst & Young; just as 'KFC' left 'Kentucky Fried Chicken' in the dust), have an index that shows the United States' renewables sector could be on its way down - giving way to, who else, China.
According to EY in an e-mailed report:
"China scored 73.1 out of 100 on the Renewable Energy Country Attractiveness Index in the fourth quarter, up from 71.6 in the third, while the U.S. slipped to 74.4 from 74.7."
Germany, Japan and the UK were next in line.
It could be likely that China's renewable energy demand, driven in large part by cutting down on air pollution, is itself driving the prices of neodymium, silicon, cobalt cathodes and other materials used by PVs, wind turbines, etc. The monthly Renewables MMI registered a value of 65 in March, an increase of 3.2 percent from 63 in February:
According to Bloomberg New Energy Finance:
"[China] installed about 14 gigawatts of wind power in 2013 and is targeting 18 gigawatts this year. In contrast, U.S. wind installations plummeted to 1,084 megawatts last year from 13,131 megawatts in 2012 after a tax credit lapsed, according to American Wind Energy Association data."
Is this a harbinger for things to come? According to the AWEA's data:
"Even so, the subsequent renewal of the [U.S. tax] credit means wind projects under construction now top 12,000 megawatts."
However, the rather non-existent energy policy in the U.S. causes most of the uncertainty in the sector, which is why we look elsewhere on the globe for renewable energy production drivers.
Key Price Drivers of Renewables Metals Index
After rising 5.2 percent, U.S. grain-oriented electrical steel (GOES) finished the month higher. The price of Chinese cobalt cathodes rose 3.3 percent over the past month. Neodymium gained 2.5 percent.
Meanwhile, U.S. steel plate prices fell 0.5 percent after rising the previous month. Plate prices also fell in China, while rising in Korea and Japan (for those buying in USD).