By - Jim Vess

Clean energy investment in the developing world dropped in 2018, led by China downturn

Energize Weekly, December 4, 2019

Clean energy investment in developing countries dropped by more than 20 percent in 2018 to $133 billion, while coal-fired generation surged, according to a Bloomberg New Energy Finance (BNEF) survey.

“Both suggest that despite considerable recent progress, developing countries’ power sector CO2 emissions are rising rapidly,” BNEF’s annual Climatescope report said.

A total of 107 gigawatts (GW) of clean energy generating capacity was added in the 104 emerging markets Bloomberg assessed, but at the same time, the amount of coal-fired electricity in those markets rose 8 percent to 6,900 terawatt-hours.

“Despite progress, the transition is not moving nearly fast enough to address the climate challenge,” BNEF said. “In the 102 non-China/India economies surveyed by Climatescope, just 38 percent of new 2018 capacity added was clean. In almost half the 83 markets that recorded capacity growth in 2018, fossil fuels represented the main technology type deployed.”

In 2018, developing nations added 201 GW of new power-generating capacity to their grids with clean energy (non-large hydro renewables) accounting for just over half the total.

While clean energy generation made up more than half the 201 GW of new generating capacity added by developing nations, because they are intermittent sources, they will provide less than half the electricity, with coal and natural gas filling the gap, BNEF said.

New construction of coal-fired power plants was at its lowest level in a decade in 2018, dropping to 39 GW from a 2015 peak of 84 GW.

China, which tallies two-thirds of the emerging markets activity, accounted for the bulk of the drop in overall investment, posting a $36 billion decline.

India saw a $2.4 billion decline in investment in 2018, and Brazil’s clean energy investment was down $2.7 billion compared with 2017.

Still, foreign direct investment for supporting clean energy set a new record in 2018, up nearly 9 percent to $24.4 billion, with European Union organizations as the key source of foreign capital.

Of the $133 billion invested in 2018, $68 billion went to wind projects and $62 billion to solar installations.

When China is taken out of the mix, clean energy installations in the rest of the developing markets grew 21 percent in 2018 and reached a record 36 GW, up 12 percent from 2017 and three times the capacity installed in 2013.

Nevertheless, coal-fired electricity generation in developing nations is up 54 percent since the start of the decade with a 7 percent jump in just the last year.

“Given the massive challenge of limiting global warming to 1.5 degrees Celsius, this year’s Climatescope offers a stark reminder of the work ahead,” BNEF said. “Rapidly growing nations that today are just as rapidly expanding their carbon footprints must reach net-zero emissions by 2050. To get there, those currently leading the energy transition must keep growing their clean energy sectors while dormant renewable energy markets must also emerge.”

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