Emerging economies stake $126 billion on clean energy
A release Climatescope in Lagos yesterday, revealed that developing nations eclipsed the world’s wealthiest countries in 2014, attracting more clean energy investments, building more wind, solar, and other renewable power generation than ever before.
However, the group noted that Nigeria has risen several places up the ranking, particularly because it had a higher amount of investment in 2014 than the previous year. It had the only other clean energy financing outside of Kenya and South Africa above $100 million in 2014, for 40MW of small hydro.
Although, Nigeria has gone through the most extensive reforms in Africa to liberalise its power sector and open it up to investors, this, it stated, has not yet translated into serious investment in renewables.
The country was not critically analysed in the report, but it expected “Nigeria to become a more serious player on the Climatescope index in future years”, when government would have effected its proposed changes to the feed-in tariff for renewables that would make it much more attractive to investors.
Climatescope, the clean energy country competitiveness index, interactive report and online tool supported by the UK, US governments and the Inter-American Development Bank Group, offers a compelling portrait of clean energy activity in 55 emerging markets in Africa, Asia and Latin America and the Caribbean. The group includes major developing nations China, India, Pakistan, Brazil, Chile, Mexico, Kenya, Tanzania and South Africa, as well as dozens of others.
News of the rising prominence of lesser developed countries comes on the eve of an important round of UN-organised climate negotiations kicking off in Paris at the end of November.
Those talks have often focused on the question of how much capital wealthier countries should make available to lesser developed countries to address the climate challenge.
The report also finds that for the first time ever, over half of all new annual investment into clean energy power generating projects globally went toward projects in emerging markets, rather than toward wealthier countries.
“New investment in renewables soared in 2014 in the 55 Climatescope countries assessed to hit a record annual high of $126 billion, a significant improvement from $35.5 billion, or 39 per cent, from 2013 levels.
The results were substantially bolstered by the remarkable growth in China, which added 35GW of new renewable power generating capacity all on its own – more than the 2014 clean energy build in the United States, United Kingdom, and France combined.
Meanwhile, ‘South-South’ investment (funds deployed in Climatescope nations from banks or other financial institutions based in those countries) surged to $79 billion in 2014 from $53 billion the year prior.
Continuing declines in clean energy costs appear to be driving growth. Costs associated with solar photovoltaic power have ticked down 15 per cent year-on-year globally. Solar is particularly competitive in emerging markets which often suffer from very high power prices from fossil generation while also enjoying very sunny conditions.
“A total of 50.4 gigawatts (GW) of new clean capacity was built in Climatescope countries, marking a 21 per cent uptick from the prior year. In another first, renewables capacity deployed in emerging markets topped that in wealthier Organization for Economic Co-operation and Development (OECD) nations,” it stated.
According to the report, progress in 2014 was achieved despite a number of countries in the survey seeing economic growth rates slow.
Average gross domestic product growth across Climatescope nations was assessed to have slipped to 5.7 per cent in 2014 from 6.4 per cent in 2013 with the slow-down most apparent in major nations, Brazil, South Africa, and China.
Despite the pullback, these three countries attracted a total of $103bn in new clean energy investment in 2014.
The Multilateral Investment Fund (MIF) of the Inter-American Development Bank Group (IDB), the UK Government Department for International Development (DFID), and the US Agency for International Development (USAID), under President Barack Obama’s “Power Africa” initiative, commissioned Bloomberg New Energy Finance (BNEF) to analyze and rank development prospects for solar, wind, small hydro, geothermal, biomass, and other zero-carbon emitting technologies (excluding large hydro).
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