According to the most recent Bloomberg New Energy Finance (BNEF) Climatescope survey, developing countries have taken a leading role in the renewable energy transition. In 2017, renewables represented the majority of all new power-generating capacity added in emerging markets, and these countries saw $143 billion in new clean energy investments. What has primed these countries for sustainability leadership, and what does this leadership look like in action?
Trends in Clean Energy
Although developed countries like the United Kingdom have made headlines for hitting renewable energy milestones, their developing counterparts have been doing significant work. For example, China made almost one-third of the world’s clean energy investments in 2018, while India was ranked fifth globally in installed renewable capacity.
China and India have also grown their coal capacity, which speaks to developing countries’ needs for electricity to support economic growth. However, some countries that lack legacy fossil fuel infrastructures may be able to “leapfrog” over fossil fuel energy sources and embrace renewables from the start.
In either case, the Paris Agreement has provided a guiding principle for many governments, who have set official targets that incentivize new clean energy investments. For example, India is on pace to exceed its Paris Agreement targets for emission reductions and renewable capacity. Moreso, Morocco is one of only two countries whose goals have been rated by Climate Action Tracker to be compatible with the Paris Agreement’s more aggressive 1.5˚C global warming threshold.
What makes all this possible is the falling cost of renewable energy. A recent International Renewable Energy Agency report found that unsubsidized renewables are often cheaper than fossil fuels, a trend that is expected to continue as technology costs drop.
Spotlight on Latin America
Latin American countries have made noteworthy progress in renewable energy. The Institute for Energy Economics and Financial Analysis has called Uruguay a “profoundly instructive example that can be applied in countless other countries.”
While hydropower gave the country a head start, it has increasingly adopted solar and wind, which now account for over 40% of its power generation (up from 1% in 2013). Uruguay also exports electricity produced through clean energy solutions to larger neighboring countries like Argentina and Brazil.
Meanwhile, Chile was ranked first in the Climatescope survey of countries driving the energy transition. BNEF cites the country’s sympathetic policies, its record of clean power investments, and its ambitious commitments. Renewables powered a quarter of Chile’s energy in 2017, and its mandates aim for 60% renewable energy generation by 2035, according to BNEF.
Despite these trends in innovation and renewable infrastructure, the US Energy Information Agency predicts that it will not be until 2050 that renewable energy sources account for half of the world’s overall electricity generation.
Want to learn more about renewable energy trends? Read:
- Clean Energy Investment, Policy, Innovation to Propel Further Renewable Growth and Demand
- Tracking Coal Production in the Face of the Paris Agreement
- Low-Cost Renewables Have Big Implications for the Utilities Industry
- The Low Cost of Renewable Energy Is Driving Big Changes in the Power Sector
- Renewable Energy Growth and the Benefits of an Expanding Industry