Developing countries have surged into the lead in the effort to shift from fossil to renewable energy sources and decarbonize the global economy, Bloomberg New Energy Finance is reporting in the 2016 edition of its Climatescope competitiveness index, produced in partnership with UK Aid and USAID.
“The centre of the clean energy universe has shifted decisively from ‘North’ to ‘South,’” BNEF states in the introduction to its annual review of 58 African, Asian, Caribbean, Latin American, and Middle Eastern nations.
“Climatescope countries in 2015 set a new record for clean energy installations with 69.8 GW built, up 30% from the 48.4 GW added in 2014. The 2015 total represents 10.6 GW more than the 59.2 GW of clean energy built in OECD countries, a group which includes the world’s wealthiest nations.”
The report cites falling solar equipment costs as a major driver for change, with photovoltaic investment in Climatescope countries increasing more than 11-fold, from US$6.4 to US$71.8 billion, between 2010 and 2015. Over that same period, new solar capacity increased from 289 megawatts to 49.3 gigawatts, the equivalent of South Africa’s total electricity generation today.
“Among all clean energy technologies, PV has seen its costs fall fastest and furthest over the last decade,” Bloomberg notes. “This has allowed capital expenditures (capex) for projects in Climatescope countries to drop by more than half since 2010. It has also allowed PV project developers to sell their power at lower, more competitive rates.”
With 23 of the 58 countries classified as “off-grid”, Climatescope notes that East Africa, in particular, is home to some of the world’s leading “pay-as-you-go” solar companies.
“Off-grid solar companies located in the African markets reviewed in Climatescope have attracted approximately $115 million of venture capital investments since 2012, $90 million of which was invested in East African countries,” the review notes. “Globally, Bloomberg New Energy Finance has tracked $450 million of investment into the off-grid renewables sector, excluding mini-grids, through 2015.”
And with China and India in the lead, Climatescope countries “greatly contributed” to the unprecedented rapid entry into force of the Paris Agreement, with all but Nicaragua signing the deal last year and three-quarters of the 58 adopting emission reduction and clean energy targets by the end of 2015. That tally was “up markedly from 2013, when 18% had such goals and just half had set clean energy deployment objectives.”
On the other hand, Bloomberg notes that Climatescope countries commissioned a record 77 gigawatts of new coal capacity in 2015. “The ambition and implementation of these targets will be all the more important considering the pace at which new fossil generation capacity is being added.”