Emerging Economies Overtaking the Establishment on Renewables

You might be surprised to learn that renewable energy growth in emerging economies could soon outstrip the gains made in the developed world. According to Moody’s, emerging economies’ share of the total installed wind and solar capacity is expected to reach 51 percent and 52 percent respectively next year. How could this be? Consider the fact that some developing countries have considerably less existing infrastructure that could stand in the way. Other drivers include the fact the energy demand is growing in many of these countries and a number of them have joined with more than 50 countries that have committed to phasing out fossil fuel subsidies, that still substantially exceed those for renewables.

Let’s take a look at some statistics. Of course, a lot of this is driven by India and China. According to the REN21 2017 Global Status Report, Asian countries led the way for the fourth consecutive year in solar investment, accounting for about two-thirds of global additions, led by China, India and Japan (which surpassed Germany in cumulative capacity). China’s 34.5 GW added last year, was slightly more than the rest of the top ten, combined.

But off-grid applications – in countries like Bangladesh, India, Malawi and Peru – also played a significant role.  The biggest market was in sub-Saharan Africa, as shown by the top five countries for distributed, off-grid solar systems: India, Kenya Uganda, Ethiopia and Tanzania. These generally consists of tiny pico-scale systems that are used primarily for lighting and cellphone charging.

According to Climatescope 2014 — a worldwide analysis by Bloomberg New Energy Finance (BNEF) found that between 2008 and 2013, developing countries in Latin America, the Caribbean, Asia, and Africa  grew their renewable energy capacity 143 percent. Compare that with the 84 percent growth found among the more affluent OECD countries.  Grid development also grew disproportionately among developing countries.

Looking ahead, the Middle East and north African countries are scheduled to have installed 14GW in solar plants by the end of 2018, while Central and South America are also expected to reach 14GW. These represent five- and sevenfold increases from 2015.

Elsewhere in the world, countries like Costa Rica, Albania, and Afghanistan are getting off the fossil fuel bandwagon. Costa Rica is well on its way to becoming the first 100 percent renewable country, helped by their endemic geothermal and hydropower resources. They claim to already get 98 percent of their power from renewables, with the last little bit (always the hardest) coming online by 2025.

Tiny Albania has set an aggressive target of 38 percent non-hydro renewables by 2020. The government is currently in the process of streamlining regulations and licensing procedures in hopes of eventually becoming a clean energy exporter.

Afghanistan, despite its proximity to Middle Eastern oil reserves, is turning towards renewables, largely due its fragmented condition and lack of centralized infrastructure. The region’s abundant sunshine and considerable wind resources in the mountain make this a logical choice.

Who would have guessed that Mauritania ranked #1 in renewable investment as a percentage of GDP?

Moody’s predicts that by the end of 2019, emerging markets will host 353GW of solar capacity, a 29.8 percent increase from today, outpacing the estimated 349GW of wind power, which is 13.7 percent more than today.

All told, renewables accounted for 19.3 percent of total world energy consumption in 2015. With prices for wind and solar generation equipment continuing to fall, along with storage, which is becoming more widely available, don’t be surprised to see that number continue to grow.