Climatescope 2018: New emerging leaders in clean energy investment

Developing nations are leading a global clean power transition. Last year’s Climatescope documented how the locus of clean energy activity had shifted noticeably from “North” to “South”, from OECD to non-OECD countries. This year’s survey goes one step further by illustrating how less developed nations are now very much driving the energy transition.

Leadership is an elusive quality to quantify. Still, this year’s Climatescope offers compelling evidence that developing nations are at the forefront of change toward a cleaner-powered future. Consider:

  • In 2017, the large majority of the world’s new zero-carbon power capacity was built in developing countries. A total of 114GW was added in these nations, compared with approximately 63GW added in wealthier nations.
  • In a first, renewables accounted for the majority of all new power-generating capacity added. Developing countries added 186GW in 2017 to their grids with wind and solar accounting for 94GW – just over half.
  • Clean energy deployment is growing fastest in developing nations. New-build additions rose 20.4% year-on-year in these countries and fell by 0.4% in wealthier nations.
  • Coal build has fallen sharply in developing countries. Coal additions slipped to 48GW in 2017.
  • Developing countries are driving down clean energy costs, making these technologies more competitive with fossil generation.
  • Clean energy investment is being deployed in more nations than ever. As of year-end 2017, 54 developing countries had recorded investment in at least one utility-scale wind farm and 76 countries had received financing for solar projects.
  • Progress has of course been fueled by investment. In 2017, new clean energy financings in emerging markets totaled $143 billion.


So how did the top countries fare?

Chile

Chile was ranked first in this year’s survey as the most attractive emerging nation for clean energy investment. The Andean nation fared well on Climatescope’s three parameters thanks to strong government policies, a demonstrated track record of clean energy investment, and a commitment to de-carbonization despite grid constraints.

The government has set ambitious long-term goals for adding clean energy capacity and begun implementing policies to foster an environment where renewable projects are more competitive. Targets include a clean energy mandate at 20% of generation for utilities by 2025 and an overall clean energy target of 60% of generation by 2035. By 2050, the country aims to have 70% renewables generation from its electricity mix.

By December 2017, Chile had installed 1.9GW of solar and 1.3GW of wind capacities, representing 13% of national installed capacity. In 2017, all renewables assets represented 24% of all energy generated in Chile. Wind generation in Chile surged from 1.4TWh in 2014 to 3.5TWh in 2017, while solar output spiked from 0.5TWh to 3.9TWh.

India

India came in close second. The Indian market is home to the largest and most competitive auctions in the world, which contracted over 10.5GW from wind and solar in 2017 alone. Auctioned capacity has ramped up by 68% since 2017 as the country moves closer to meeting its goal to install 175GW of renewables by 2022, with 100GW coming from solar alone. The country’s solar market almost doubled in size in 2017, making it a record year with annual PV installations touching 8GW.

India was the world’s fifth largest clean energy investment market in 2017, jumping up from being the sixth largest in 2016. Clean energy investment totaled $7.4 billion in the first half of 2018, with solar power projects accounting for the majority. India’s solar market almost doubled in size in 2017, making it a record year with annual PV installations touching 9.4GW.

Jordan

Jordan came in third position. Jordan’s National Energy Strategy plan aims for the country to generate 10% of its energy needs by 2020 from renewable sources. Since launching in 2015, the plan has already seen 730MW of renewable projects come into operation, with 1036MW under construction and a further 150MW under financial close. Jordan also has over 1GW of clean energy currently under construction.

Wind and solar have been the focus of renewable investment to date with 533MW of solar and 197MW of wind currently operational. The government is launching a 30MW battery storage project and has requested proposals for its development by the end of 2018. It has targeted a further 70MW of battery storage capacity pending the outcome of the project.

And what about China?

China remains critical to the global clean energy story but fell to seventh in the survey from top of the table last year. While China remains the largest market for clean energy build by far, curtailment issues and the halting of subsidies to solar generators dented its score.

Climatescope’s updated methodology also places greater emphasis on countries’ openness to international investors over the availability of local manufacturing. While these changes contributed to China’s drop, its unrivaled clean energy investment and potential for de-carbonization ensured it remained in the survey’s top ten.

 

The complete Climatescope survey, including complete data sets for all 103 emerging markets, can be found at www.global-climatescope.org.

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