US, China lead EY renewables attractiveness index and new BESS ranking

The US leads the new EY ranking of the world’s most attractive markets for battery energy storage system (BESS) investment, aided by a 30% tax credit under the Inflation Reduction Act (IRA).

This is unveiled in the latest edition of EY's Renewable Energy Country Attractiveness Index (RECAI), released today.

When it comes to battery investment attractiveness, the US is followed by China with its strong government support, subsidies and plans to cut BESS costs by 30% by 2025. The UK comes third thanks to its energy market design and a new energy bill that classifies BESS as a generation asset, the consulting firm said.

Investor interest in BESS is growing, with the technology having the potential to play a key role in overcoming the network gridlock challenge impeding clean energy progress.

As per renewables attractiveness, the US, China, and Germany keep the top three positions, with China and Germany switching places.

The top ten also features France, Australia, the UK, India, Denmark, Canada and Japan. Spain has dropped out of the top 10 due to grid constraints, while Canada and Japan have moved in on the back of offshore wind ambitions. Belgium has climbed four spots to 17th as it aims to triple its offshore wind capacity by 2040.

The chart normalised with the gross domestic product is headed by Denmark, Greece and Chile.

The report also includes a PPA index.

Corporate power purchase agreements (PPAs) had a slow start in 2024, but the market is now picking up, favoring buyers. In Spain, companies with fixed-price PPAs are struggling as excess renewables drive prices close to zero. In contrast, Italy has moved up to ninth place in the index, with stubbornly high market prices encouraging more companies to sign deals despite regulatory challenges.

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