The Allianz Climate and Energy Monitor ranks G20 member states on their current attractiveness as potential destinations for investments in low-carbon electricity infrastructure. It further considers their current and future investment needs in line with a trajectory compatible with the 2°C/1.5°C temperature limits of the Paris Agreement.

Key findings :

• France now most attractive for renewable energy investments, Brazil climbs 5 ranks and Italy 4 ranks with much improved conditions.
• All countries need to improve their policy framework for required low-carbon investments.
• Germany loses first rank, South Korea and Indonesia fall by 8 and 4 ranks

France gains the 1st position due to an overall favorable environment for renewables, leading the G20 in investment attractiveness of renewables. Germany falls back one rank due to a drop in the quality of the overall policy environment for renewables and some deficiencies in policy design, as does the UK. Overall, with four European countries on top of the list, Europe still leads the way in providing attractive conditions for investing in renewables. Despite high scores for several countries, no single country is yet close to becoming a role model. All countries still have considerable room for improving investment conditions to deploy renewables at the scale needed to reach Paris targets. Brazil improved its ranking significantly (from rank 13 to 8). The US, unsurprisingly, has fallen two ranks to 9 as a result of recent policy decisions issued from the federal government, drastically cutting down its support for renewable energy policies. Russia occupies the last place amongst the G20, while formerly lagging countries such as Saudi Arabia and Turkey have made small improvements, gaining rank 16 and 15 respectively.

• Very few countries, like UK, France and Mexico follow a concrete and binding long-term strategy.

Governments are not following the ambition they set out in the Paris Agreement of 2015. Scientists now unequivocally agree that global CO2 emissions have to be net-zero by 2050 to keep global warming below 1.5°C (IPCC, 2018). Yet among the G20, only Canada, France, Germany, Mexico, the UK and the US formally submitted a long-term decarbonization strategy that extends to 2050 to the United Nation’s body responsible for climate change issues (UNFCCC). Of these, only the UK’s strategy proposes a full decarbonization of the power sector. The current US government no longer supports its own strategy, after stating its clear intention to withdraw from the Paris Agreement in 2017. Ambition of national targets for renewable energy fall short of decarbonization of the power sector needed to live up to the Paris Agreement in most countries, with only Germany, France, Brazil and Argentina planning sufficient annual renewable installations. Additionally, most countries only have a medium-term vision with regards to renewables expansion, with targets rarely extending beyond 2025 or 2030. Consequently, these conditions may make a timely energy transition difficult for the majority of G20 countries.

• Previous stragglers like Saudi Arabia and Turkey are improving their policy environment, while some developed countries such as Australia and the US still have not taken charge.

In 2017, many G20 countries continued to improve the design of their direct policies in support of renewables. Some countries that were seen as stragglers in previous years are now taking steps to improve their policy portfolios. Notable mentions include the Argentinian government’s push for renewables through its RenoVar auctioning scheme, the successful start of Saudi Arabian renewable auctions which obtained highly competitive bids, and the launch of the Turkish YEKA auctioning scheme that jumpstarted renewable deployment. On the other hand, the US and Australia continue to decrease federal support despite having more mature markets and experienced institutions in place.

• Direct support policies for renewables are strong in many countries such as France, India, Brazil, and Japan but all countries can improve certainty of policy signals and administrative procedures.

Many G20 countries (e.g. China, Germany, India, Brazil, Japan and France) have a comprehensive framework of direct support policies, such as feed-in-tariffs (FiTs), auctions and renewable purchase obligations and financial support policies for all relevant renewable energy technologies. But all countries have room to improve the creation of effective policies and the provision of certainty to attract investments. This would include uninterrupted policy support, clear administrative procedures, ensuring realization of projects and use of the produced electricity.

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