Clean energy investment in emerging markets around the world has fallen sharply

New investment in wind, solar and other clean energy projects in developing countries fell sharply in 2018, largely due to slowing
growth in China.
BloombergNEF's annual survey of 104 emerging markets noted that while the number of new clean power plants built was flat year-on-year, coal power generation soared to new highs
.

The findings suggest that developing countries are moving towards cleaner energy sources, but not fast enough to limit global carbon dioxide emissions or the consequences of
climate change.
For example, most of the new capacity added in 2018 in developing countries came from wind and solar
.
However, most of the electricity produced by all additional power plants in 2018 will come from fossil fuels and emit carbon dioxide
.
This is due to the fact that wind and solar projects are only generated when natural resources are available, while oil, coal and gas plants have the potential to produce
around the clock.

Meanwhile, actual coal-fired power generation in developing countries jumped from 64,000 in 2017 to 69,000 MWh
in 2018.
New coal consumption of about 500 MWh is roughly equal to all the electricity
consumed by Texas under normal conditions.
Of the 104 emerging markets surveyed by Climatescope, coal accounts for 47%
of total electricity generation.

China plays a crucial role
in this process, both as the world's largest emitter of CO2 and as the largest market for clean energy production and consumption.
Chinese investment in new wind, solar and other non-large hydrorenewable energy projects fell from $122 billion in 2017 to $86 billion in 2018
.
The net decline reflects a $36 billion drop in clean energy investment in emerging markets, the largest annual decline ever tracked by Climatescope
.

However, the decline is not limited to China
.
Inflows to clean energy projects in India and Brazil decreased by $2.
4 billion and $2.
7 billion
, respectively, from the previous year.
Investment fell to $133 billion in 2018 across all emerging markets surveyed, lower than not only the total investment in 2017, but also below the 2015 figure
.
Overall, the decline in the cost of solar and wind energy played an important
role in the decline in dollar absolute investment in emerging economies.

Luiza Demôro, project leader at BloombergNEF, said: "There is no doubt that the results of this year's Climatescope tracking have been disappointing
.
However, we do see some important and positive developments
in terms of new policies, investments and deployments.
In India and Brazil, for example, clean energy investment jumped from $30 billion in 2017 to $34 billion
in 2018.
Most notably, Vietnam, South Africa, Mexico and Morocco invested a total of $16 billion
in 2018.

Excluding China, new clean energy installations in emerging markets grew by 21% to a new record, reaching 36GW of clean energy in 2018, compared to 30GW
in 2017.
That's double the amount of new clean energy capacity added in 2015 and three times
the installed capacity in 2013.

According to Climatescope, the rate at which new coal power installations in developing countries are slowing
despite the surge in coal-fired power generation.
The number of new coal-fired power plants fell to its lowest level in a decade in 2018
.
After peaking at 84GW of new capacity in 2015, coal project completions plummeted to 39GW
in 2018.
China accounted for two-thirds
of the decline.

Ethan Zindler, head of the Americas at BNEF, said: "Developing countries are transitioning
from coal to clean energy.
But like trying to convert into a large tanker, it takes time
.
”

Climatescope's results come ahead of
the UN's climate talks in Madrid next month.
Under the Paris Climate Agreement, signed in 2015 by the United Nations Framework Convention on Climate Change (UNFCCC), more than 190 countries have agreed to drastically reduce their CO2 emissions to avoid the worst impacts
of climate change.
Moreover, under the agreement, rich countries pledged $100 billion in "North-South" funding to developing countries to help them develop sustainably
.

While some progress has been made this year, this year's Climatescope results show that a lot of additional work
is needed to meet this promise.
Of the $133 billion in asset financing to support the development of new clean energy projects in developing country markets, only $24.
4 billion (18 percent) came from resources
outside those countries.
The vast majority of this comes from private capital sources, such as international project developers, commercial banks and private equity funds
.
Inflows from development banks, largely financed by OECD governments, did reach a record $6.
5 billion
in 2018.
However, there is no indication that the overall goal of $100 billion a year to support climate-related activities will be achieved
anytime soon.