»New renewables projects in emerging markets regularly outcompete new fossil plants on price«, BNEF

»Surging electricity demand, sinking technology costs, and innovative policy-making have allowed developing nations to seize the mantle of global clean energy leadership from wealthier countries,« a comprehensive new study from Bloomberg New Energy Finance (BNEF) concludes. According to the consultancy’s annual »Climatescope«, in 2017 developing nations added 114 GW of zero-carbon generating capacity of all types, with 94 GW of wind and solar generating capacity alone – both all-time records. Concurrently, they brought on line the least new coal-fired power generating capacity since at least 2006. New coal build in 2017 fell 38 percent year-on-year to 48 GW. That represents half of what was added in 2015 when the market peaked at 97 GW of coal commissioned.
»It’s been quite a turnaround. Just a few years ago, some argued that less developed nations could not, or even should not, expand power generation with zero-carbon sources because these were too expensive,« said Dario Traum, BNEF senior associate and Climatescope project manager. »Today, these countries are leading the charge when it comes to deployment, investment, policy innovation and cost reductions.«
This shift is being driven by the rapidly improving economics of clean energy technologies, most notably wind and solar. »New renewables projects now regularly outcompete new fossil plants on price – without the benefit of subsidies.« In the more than 28 GW contracted through tenders in emerging markets in 2017, developers are delivering wind for as low as $17.7/MWh and solar for as little as $18.9/MWh, says the consultancy.
According to BNEF, development banks, export credit agencies, and other traditional backers of projects in emerging markets continue to play an important role in the clean energy build-out. But private players, most notably international utility companies, are now among the top investors as well. For 2018, the project was expanded to survey 100 nations classified by the Organization for Economic Co-operation and Development (OECD) as less developed, plus Chile, Mexico, and Turkey, which represent important clean energy markets.
Despite successes achieved by clean energy to date in developing countries, Climatescope’s findings include that actual generation from coal-fired plants rose 4 percent year-on-year to 6.4TWh. »And despite ample evidence that new-build renewables can underprice new-build coal-fired plants, 193 GW of coal are currently under construction in developing nations«, some 86 percent of this capacity is due on line in China, India, Indonesia and South Africa, says the consultancy.
The study »Climatescope 2018« was underwritten by the U.K. Department for International Development. The survey, including complete data sets for all 103 emerging markets is available free of charge as PDF (66 pages) and can be found at »www.global-climatescope.org«.

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