Developing Countries Lead in Embracing Clean Energy Globally

Developing countries have made unprecedented pledges to consume more clean energy tomorrow even as they are leading the way today with record new wind and solar project completions as the latest edition of Climatescope concludes.

Climatescope, the clean energy country competitiveness index and online tool supported by the UK and US governments offers a compelling portrait of clean energy activity in 58 emerging markets in Africa, Asia and Latin America and the Caribbean.

The group includes major developing nations China, India, Egypt, Pakistan, Brazil, Chile, Mexico, Kenya, Tanzania and South Africa, as well as dozens of others.

This marks the third year Climatescope has been conducted globally and reflects activity in 2015, a year that culminated with the signing of the Paris Climate Agreement at UN-sponsored talks in December.

In the run-up to those negotiations, 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.

These countries are not waiting to get started on adding renewable capacity, however, between them, they added 69.8 gigawatts of new wind, solar, geothermal, and other renewable power generating capacity in 2015 – the same as total installed capacity in Australia today.

China accounted for the majority of activity in Climatescope countries, but smaller nations also played important roles. By comparison, wealthier Organization for Economic and Co-operation and Development (OECD) countries built 59.2 gigawatts last year.

 IN AFRICA:

• Clean energy policies are becoming more widely adopted across Sub-Saharan Africa.Fourteen of 19 Climatescope countries from the region have introduced renewable energy targets. This is illustrated in clean energy investment which nearly doubled between 2014 and 2015, to reach $5.2bn. Climatescope’s African nations also update their climate change policies in the lead up to the Paris climate conference. All 19 surveyed submitted commitments, 14 of which already included emissions reduction targets.
• The role off-grid electrification solutions play is increasingly recognized by governments.All 19 Climatescope countries in the region have stated targets for improving electrification rates, and 13 have explicitly detailed plans to incorporate off-grid solutions to achieve their goals. Off-grid electrification companies in Kenya, Tanzania and Zimbabwe received approximately $80m in new investment in 2015, more than four times the amount recorded in 2014, confirming the emergence of East Africa as a leading region in the sector.
• 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 $4.1bn of new investment in 2015. Uganda (7^thglobally) and Kenya (10^th) also made the top ten thanks to significant policies supporting clean energy development, healthy investment activity and a growing number of stakeholders involved in the energy sector. Jordan, which was surveyed by Climatescope for the first time, finished 11^th. The country’s solar sector in is in full expansion with $409m invested in 2015 on the back of extensive support policies for the technology.

 GLOBALLY:

• Steep solar equipment cost declines are catalysing build and driving growth. Investment in utility-scale solar in Climatescope nations spiked 43% to $71.8bn in 2015. Tenders held for power-delivery contracts have highlighted that photovoltaics (PV) can now compete against and beat fossil-fuelled projects on price in some nations.

• Cheap solar, innovative business models, and a new breed of entrepreneurs are revolutionizing how energy access issues are addressed in least developed nations. New players focused on “off-grid” or “mini-grid” solutions are challenging the assumption that only an expanded hub-and-spoke power grid can meet the needs of the world’s 1.2bn with inadequate access to power. A slew of these start-ups is privately-funded and between them had raised over $450m cumulatively through year-2015.

• Developed economies are accelerating funding for clean energy in emerging markets.  Privateinvestors, lenders, and development finance institutions in OECD countries accounted for nearly half of all capital to Climatescope countries (excluding China, where virtually all capital was provided locally). This is up from the roughly one third of capital provided in 2012.

• Some Climatescope countries with the highest rates of clean energy penetration are beginning to encounter integration challenges. Some have seen projects completed before sufficient transmission could be built. Others have not prioritized clean electrons from wind or solar projects in their grids over those from coal-fired plants.

• Improving conditions and rising ambitions are reflected in higher scores achieved by the majority of countries surveyed under Climatescope. The project scores countries on a 0-5 basis based on the conditions they create for fostering clean energy development. Across all countries, the average rose from 1.14 last year to 1.35 while the number of countries scoring above 2 jumped from two to 10.  As in the past two years, China once again topped the list of all countries. Chile, Honduras, Kenya, Mexico and Uruguay are the top scorers that recorded the most improvement.