Energize Weekly, January 29, 2020
India is moving to the top as an emerging-market destination for clean energy investment, followed by Chile and Brazil, while China, long the biggest market, slips to fourth, according to an analysis by Bloomberg New Energy Finance (BNEF).
Bloomberg’s Climatescope evaluated countries based on market and policy fundamentals, experience with green investment and opportunities.
India has “one of the world’s most ambitious renewable energy targets,” BNEF said. The country has a goal of adding 175 gigawatts (GW) of renewable capacity by 2022, with 100 GW of solar, 60 GW of wind and 15 GW from other sources.
The country has also held the largest and most competitive auctions for clean energy power-delivery contracts. In 2018, the auction delivered 19 GW of power.
“Together, these developments pushed the country to the top of the table on its Fundamentals score,” BNEF said. It also put India at third place on opportunities.
Renewables, excluding hydropower, now compose about 23 percent of India’s 356 GW of generating capacity.
Moving into second place is Chile as the government has adopted long-term clean energy goals and policies to make renewables more price competitive.
Among the initiatives is a clean energy mandate for utilities to have 20 percent clean energy generation by 2025 and 60 percent by 2035.
The country has set a goal of 70 percent renewable generation by 2050. This put Chile in second place on fundamentals.
Since October, Chile has been seized by a wave of protests, initially touched off by a hike in the metro fare, but extending to complaints about the privatization of the pension system, low wages and high prices, and the ruling elite.
“Recent events have certainly called into question the stability of the Chile market and Climatescope scores are based on a country’s status as of the prior year-end,” BNEF said.
At the end of 2018, Chile had 2.3 GW of solar and 1.5 GW of wind online, about 16 percent of the country’s total installed capacity.
In 2018, wind and solar accounted for 11 percent of total power generation, up from almost zero five years earlier.
Brazil took third place in Bloomberg’s rankings and remains the largest market for renewable energy in Latin America.
While the country’s grid remains very reliant on hydropower, which provided 65 percent of Brazil’s generation in 2018, it does have 162 GW of installed renewable generation and the year-on-year growth of non-hydro renewables reached 18 percent in 2018.
“The country has a comprehensive and inviting clean energy policy framework and has pioneered competitive auctions to contract clean energy, which led to over 28 GW of renewable energy contracted 2009-2018,” BNEF said.
Brazil drew nearly $56 billion in new asset finance for clean energy plants 2009 to 2018, by far the largest amount in Latin America over the period.
China has been the largest emerging market for clean energy investment, but a decade of sustained growth hit a wall in 2018 as the country readjusted clean energy policies, resulting in a drop of almost 30 percent in investments year-on-year to $86 billion.
Construction of new renewable capacity dropped in 2018 to 71 GW from 76 GM in 2017.
“Generous feed-in tariffs that were the norm for much of the past decade are coming to an end,” BNEF said.
China still represents a large and promising market and was the highest scoring country for opportunities in the Climatescope evaluation.
Coal-fired plants still provided 65 percent of China’s generation in 2018. That is a 10 percent decline from 2012. Wind and solar now make up 20 percent of capacity and 8 percent of generation.
In fifth place on Climatescope list is Kenya, which is slowly boosting the share of non-large hydro renewable generation with the addition of wind, solar and geothermal capacity.
In 2018, clean energy investment hit a record $1.4 billion, and non-hydro renewables accounted for 38 percent of the country’s capacity and 49 percent of generation.
The country is shifting from feed-in tariffs to reverse auctions as its main means for spurring new build. In August 2018, the parliament approved draft legislation to make this change, but final action is still required.
