A new report from Bloomberg New Energy Finance has
highlighted the rising importance of developing nations in driving clean energy
adoption worldwide, and finds they are seizing the mantle of global clean
energy leadership from wealthier, more developed nations.
A combination of surging
electricity demand, declining technology costs, and a surge in innovative
policy-making have resulted in developing nations stepping up to seize the
mantle of global clean energy leadership from wealthier nations, according to a
comprehensive new report published by Bloomberg New Energy Finance (BNEF) as part
of its annual Climatescope project.
According to the report, emerging market nations surveyed by
Climatescope accounted for the majorities of clean energy capacity added, and
new funds deployed, globally in 2017. Specifically, developing nations added an
impressive total of 114 gigawatts (GW) worth of zero-carbon generating capacity
— including 94 GW worth of wind and solar. At the same time, developing nations
brought online the least amount of new coal-fired power generating capacity
since at least 2006 — with new build coal falling 38% year-over-year to 48 GW,
half of what was added in 2015.
“It’s been quite a turnaround,” said Dario Traum, BNEF senior associate and Climatescope
project manager. “Just a few years ago, some argued that less developed
nations could not, or even should not, expand power generation with zero-carbon
sources because these were too expensive. Today, these countries are leading
the charge when it comes to deployment, investment, policy innovation and cost
reductions.”
In addition to the increasing economic viability of clean
energy technologies — specifically technologies such as wind and solar — which
are further bolstered by the “exceptional” natural resources boasted by many
developing nations, when combined with continually declining technology
equipment costs, new renewable energy projects in developing nations are
regularly outcompeting new fossil fuel projects on price. This has been most
evident in the 28+ GW worth of generation contracted through tenders in
emerging markets in 2017.
Financing for renewable energy projects in developing
nations is similarly increasing, with 54 developing nations recording
investment in at least one utility-scale wind farm, and 76 countries receiving
financing for solar projects of 1.5 megawatts (MW) or larger (up from 20 and 3,
respectively, a year ago). Further, development banks, export credit agencies,
and other traditional backers are all combining to ensure investment and
project backing continues to support the development of clean technology
projects in emerging nations.
“European players, in
particular, have moved aggressively to finance projects, particularly in Latin
America,” said BNEF head of Americas Ethan Zindler, who helped found
Climatescope. “While concessional capital is still clearly required in least
developed countries or in others just beginning to adopt clean energy,
elsewhere private funders appear quite comfortable deploying capital at
volume.”
The report further highlights the growing trend that shows
developing nations are skipping the fossil fuel stage of economic development
which has so plagued their more developed brethren.
“I think it’s undeniable that for an equivalent level of
economic development (GDP/capita), a number of emerging markets have a much
higher penetration of solar and wind than their most developed peers had,”
explained Dario Traum, who spoke to me via email.
“That’s a factor of technology change but also of course of
cost. Emerging markets are where renewables most frequently undercut existing
power procurement cost. In particular, Latin America has a number of countries
that are amongst the countries with the highest level of solar + wind
penetration, often facilitated by hydro and interconnection with neighbours.
“Caveat to all that is that big manufacturing and
demographic hubs in Asia haven’t yet been able to get around coal as a cheap
way to power industry around the clock. But they are seeing the consequences
too, in particular air pollution. So a strong support for renewables there to.”
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