Last year marked the first time over half of total global clean energy investments went to projects in developing countries.
According to Climatescope 2015, a clean energy “competitiveness index” of 55 emerging economies across Africa, Asia, Latin America and the Caribbean, 2014 marked an all-time high of $126 billion in new renewable energy investments in the developing world. That number was up $35.5 billion, or 39 per cent, over 2013 figures.
And the majority of this investment didn’t stem from developed markets in the northern hemisphere investing in the South, as one might assume. Rather, $79 billion, or 63 per cent of the funds, was “south-south investment” between the 55 nations in the study, which include China, India, Brazil and South Africa.
“2014 brought further proof that clean energy activity is shifting inexorably from ‘north’ to ‘south,’ from developed to developing countries,” the report’s authors conclude in the executive summary.
China is the major driver of this shift, adding 35 gigawatts of new renewable capacity last year alone, compared to the combined 15.5 gigawatts added by the other 54 Climatescope countries.
The growth rate of cumulative clean energy installed in these countries reached 21.2 per cent, more than doubling that of the Organization for Economic Co-operation and Development (OECD) nations. At 50.4 gigawatts, in fact, new renewable deployment in developing markets surpassed for the first time that of OECD countries, which clocked in at 48.2 gigawatts.
In spite of last year’s economic slowdown, with the average GDP growth among the Climatescope nations at 5.7 per cent compared to 6.4 per cent in 2013 – as well as the drop in crude oil prices – the report found that renewables are becoming cost-competitive, with the cost of solar in particular having “ticked down 15 per cent year-on-year.”
But it remains to be seen if clean energy will continue to grow in developing countries.
“Since the turn of the year into 2015,” the authors wrote, “the economic outlook for Brazil, China, South Africa, and other key Climatescope markets has become even more negative.
“Time will tell if these new, more challenging conditions will put a crimp on further growth for clean energy – or if renewables remain resilient in the face of these new headwinds.”
Emerging Markets Surpass Wealthier Nations in Clean Energy Investment