BNEF: Developing countries lead the way in global clean energy development

On November 27, 2018, a comprehensive new study released by Bloomberg New Energy Finance BNEF concluded that surging demand for electricity, falling technology costs, and innovative policymaking have enabled developing countries to seize global leadership in clean energy from rich countries
.

Among them, emerging market countries surveyed by BNEF's annual Climatescope project accounted for the majority of new clean energy capacity and new funding in the
world in 2017.
These countries also play a leading role in reducing the cost of clean energy, so energy access can expand
without increasing CO2 emissions.

In 2017, developing countries added 114GW of zero-carbon capacity of all types, of which solar and wind accounted for 94GW, both of which set new records
.
It was also the fewest new coal-fired generation generation since at least 2006
.
New coal production in 2017 fell 38% year-on-year to 48GW.

This is equivalent to half of
the 97GW coal market in 2015.

"It's a good shift
.
Just a few years ago, some argued that less developed countries could not, or should not, expand their power generation with zero-carbon sources because these costs were too expensive," said Dario Traum, senior associate at BNEF and Climatescope project manager.

”

This shift is being driven by the rapid economic development of clean energy technologies, especially wind and solar technologies
.
Due to the special natural resources and drastically reduced equipment costs in many developing countries, new renewable energy projects now often compete for new fossil plants at price, even without subsidies
.
Nowhere is this more evident than in 2017, when emerging markets tendered for more than 28GW of new energy installations, including commitments by developers to provide wind for as little as $17.
7/MWh and as little as $18.
9/MWh of solar
.

Climatescope also revealed that clean energy money is going to more countries
.
By the end of 2017, some 54 developing countries had invested in at least one utility-scale wind farm, and 76 countries had secured financing
for solar projects of 1.
5MW or larger.
Development banks, export credit agencies and other traditional project backers in emerging markets continue to play an important role
in clean energy construction.
But private companies, especially international utilities, are now also among the
most important investors.

"European companies in particular are already actively financing projects, especially in Latin America," said Ethan Zindler, head of the Americas at BNEF.
"While concessional loans are still explicitly requested by LDCs or other countries that are just beginning to adopt clean energy, elsewhere it seems easier for private investors to deploy capital
in volume.
"

Despite the success of clean energy in developing countries to date, Climatescope contains sobering findings
on the scale of the challenges ahead.
While the rate of new coal capacity additions fell to its lowest level in more than a decade in 2017, actual power generation from coal-fired power plants rose 4% year-on-year to 6.
4TWh
.
According to Coalswarm, 193GW of coal is currently being built in developing countries, despite ample evidence that new renewables can compete with the price of new coal
plants.
About 86% of this capacity will come online
in China, India, Indonesia and South Africa.
In the context of global control of carbon dioxide emissions, the long-term challenge of clean energy is not just to beat new coal-fired power plants for new construction opportunities
.
Instead, it will replace existing coal-fired power plants, many of which are just coming online
.