Global Perspective: As costs decline, renewable sources are seeing an inexorable rise, particularly among developing economies
30 Jan 2019
Although the world remains largely dependent upon fossil fuels for power generation, a gradual transition towards renewable sources has been taking place since the 1990s, underpinned by multilateral deals such as the Kyoto Protocol, the Doha Amendment and, more recently, the Paris Agreement. Investment and development in renewable technologies has historically been led by developed countries, however, in recent years the renewable energy industry has been expanding in emerging markets. In 2017 these markets accounted for 63% of new global investment in renewables.
Taking the Lead
Emerging markets exceeded developed economies in terms of onshore wind capacity growth for the first time in 2013, and in terms of solar photovoltaics (PV) growth in 2016. Total installed wind and solar capacity in emerging markets is set to overtake that of developed markets: the credit rating agency Moody’s estimates that, by the end of 2018, emerging economies will boast total installed wind and solar capacity of 307 GW and 272 GW, respectively, accounting for 51% and 53% of global capacity.
While China is the main driving force behind the rapid growth of emerging markets’ use of renewable energy, the contribution of other countries is considerable. The five countries with the highest renewable energy investment as a percentage of GDP are all emerging or developing economies, according to the multi-stakeholder Renewable Energy Policy Network for the 21st century: Marshall Islands, Rwanda, Solomon Islands, Guinea-Buissau and Serbia.
Going forward, sub-Saharan Africa constitutes the world’s largest untapped market for electrification, and consequently represents a huge opportunity for renewable energy. The International Energy Agency estimates that over the next 20 years the majority of regions without electricity will gain access through decentralised solar PV systems and micro-grids.