Predictive Analysis of Global Renewable Energy and Infrastructure Growth in Developed, Developing and Emerging Markets

Abstract

The most attractive markets for renewable energy investment are shifting from the developed world to emerging economies. Among the most prominent emerging economies, China, India, and Brazil have become three of the most important global investment markets, and the role of renewable energy in each country is becoming increasingly important. At the same time smart grid advancements are creating above average returns in developed countries such as the United States and Germany.

This report analyzes renewable energy investment opportunities in USA, Germany, Brazil, China, India and Indonesia. In an effort to quantify, compare, and rank our findings for each country, our team developed a simple model to weight each metric based on each country’s policies, infrastructure, resources, and electric power market as they relate to the attractiveness of renewable energy investment. We then modified the evaluation to incorporate our client’s qualitative weighting for each evaluation criteria.

After a detailed analysis was performed, the following 3 recommendations can be made: 1. India, China and Germany have created a favorable economic and policy environment for solar investment; however, given the global nature of the industry and current uncertainty in the marketplace, we do not recommend investing in solar at this time. 2. Due to substantial line losses in India, and likely development of long-distance transmission in China and Brazil, our team foresees a substantial investment opportunity in the global transmission and distribution value chain. We recommend one discrete investment opportunity in one of India’s state-owned electric supply companies, the Calcutta Electric Supply Company (CESC), as well as smart grid component suppliers such as ABB and Thomas and Betts. 3. Growth in wind power will likely continue in Germany, specifically offshore wind. However, until the German government takes a stronger stance on its policy towards natural gas our team recommends waiting to invest in the German wind industry as the natural gas market may be a serious threat to the wind industry.