Developing countries are taking the lead on clean energy with 18% more renewable capacity than wealthier countries, according to a new report.
The Climatescope study – a clean energy country competitiveness index backed by the UK and US governments – found that between the 58 emerging markets assessed, 69.8GW of new renewable generating capacity had been created by developing countries in 2015 compared to 59.2GW by wealthier OECD countries. Additionally, four in five of the countries surveyed have now set clean energy targets.
China accounted for the majority of activity in the study, and was the only country surveyed in which almost all capital was provided locally. In general, private investment and assistance from OECD countries accounted for nearly half of all capital provided to the countries included in the study.
Significant reductions in solar photovoltaic (PV) equipment costs resulted in a 43% increase in utility-scale investment in 2015 to £58.1bn, meaning that solar PV can now beat fossil fuel prices in some nations.
In places with low access to electricity, solar technology is growing into a booming market. However, in developed nations it is understood that investment has levelled off.
“If you look at how much they [developing nations] invest relative to the size of their economy, they actually invest a lot more than a country like Germany,” said Climatescope project manager Dario Taum.
In the UK the government has reduced subsidy support for renewable technologies, which has led to some concern from the industry.
“I think the entire dialogue around the cost of renewable subsidies – again, if you put that into relationship [sic] with some other government spending – is pretty absurd,” said Taum.
“Cutting support at the time when things finally start to get really cheap and interesting means that you’re kind of losing out on a couple of important years of acceleration because eventually if renewables are increasingly competitive on their own, one could imagine that the rollout could happen by itself but profoundly the pace at which we are rolling out these renewables is nowhere near what we need to meet our target.”
The government says the revision of its renewable energy subsidies was made to tackle a projected overspend on renewable schemes, which would have resulted in bill payers spending more and receiving less value for money.
A Department for Business, Energy & Industrial Strategy (BEIS) spokesperson said: “Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.
“Nearly £52bn has been invested in renewables in the UK since 2010, and just last month we reiterated our commitment to spend a further £730M per year supporting new renewable projects over the course of this parliament.”
The Climatescope countries included major emerging markets such as India, Egypt, Chile and Mexico. Factors considered include a country’s clean energy investment policy, its market conditions, the structure of its power sector, the number and makeup of local clean energy companies and its efforts toward reducing greenhouse gas emissions.
UK and US governments commissioned Bloomberg New Energy Finance (BNEF) to conduct the Climatescope study, the third year it has taken place. The report provides the research needed to drive investment into developing economies and to secure clean, stable energy supplies for millions of the world’s poorest people.
It analysed 58 nations in Africa, Asia, Latin America and the Caribbean for their clean energy performance in 2015, a year which ended with the signing of the Paris Climate Agreement.
In the run-up to the agreement, three quarters of the Climatescope nations submitted or reiterated pledges to cut their future CO2 emissions. An even higher number are now on record with promises to achieve certain clean energy consumption goals in coming years.
Among Climatescope’s key findings:
- Cheap solar, innovative business models, and a new breed of entrepreneurs are revolutionizing how energy access issues are addressed in least developed nations.
- Improving conditions and rising ambitions are reflected in higher scores achieved by the majority of countries surveyed under Climatescope. Chile, Honduras, Kenya, Mexico and Uruguay are the top scorers that recorded the most improvement.
- China and India stood strong in the Climatescope rankings, finishing first and sixth respectively. The largest improvement in the region was achieved by Pakistan which moved to 12th position and nearly made the top 10.
- Led by China and India, Asia installed far more clean energy capacity in 2015 than the other 56 countries surveyed by Climatescope combined.
- In 2015, the Climatescope Asia countries secured £102.8bn ($127bn) in clean energy investment, or 82% of what was deployed in the 58 nations surveyed. For the first time, solar surpassed wind by attracting £51.8bn ($64bn), or just over half of total investment.
- South Africa once again was the best scoring Climatescope country in Sub-Saharan Africa thanks to record investment year and finished fifth in the global rankings. The country’s clean energy auction program led to £3.3bn ($4.1bn) of new investment in 2015.
- Clean energy policies are becoming more widely adopted across sub-Saharan Africa. 14 of 19 Climatescope countries from the region have introduced renewable energy targets. Clean energy investment nearly doubled between 2014 and 2015, to reach £4.2bn ($5.2bn).
- Latin America continues to be at the forefront in clean energy development among the nations assessed in Climatescope. However the region secured £17.7bn ($21.9bn) in clean energy in 2015, down £1.2bn ($1.5bn) compared to 2014.
- Brazil has not secured the top ranking in the Latin America and Caribbean region for the frist time. Chile occupies the first position in Latin America mainly due to record investment, which jumped from £1bn ($1.3bn) in 2014 to £2.5bn ($3.2bn) in 2015.