Developing nations assume mantle of global clean energy leadership


Surging electricity demand, sinking technology costs and innovative policy-making have allowed developing nations to lead wealthier countries in global clean energy.

This conclusion is based on the findings of a new study conducted from BloombergNEF (BNEF).

Between them, emerging market nations surveyed by BNEF’s annual Climatescope project accounted for the majorities of new clean energy capacity added and new funds deployed, globally in 2017.

These countries are also playing the leading role in driving down clean energy costs, so that energy access can be expanded without boosting CO2 emissions.

In 2017, developing nations added 114GW of zero-carbon generating capacity of all types, with 94GW of wind and solar generating capacity alone. Concurrently, they brought online the least new coal-fired power generating capacity since at least 2006. New coal build in 2017 fell 38% year-on-year to 48GW. That represents half of what was added in 2015 when the market peaked at 97GW 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.”

Wind/solar vs. fossil-fueled power-generating capacity added in developing nations, 2017
Source: BloombergNEF

This shift is being driven by the rapidly improving economics of clean energy technologies, most notably wind and solar. Thanks to exceptional natural resources in many developing countries and dramatically lower equipment costs, new renewables projects now regularly outcompete new fossil plants on price – without the benefit of subsidies.

This has been most apparent in the more-than-28GW contracted through tenders in emerging markets in 2017, involving promises from developers to deliver wind for as low as $17.7/MWh and solar for as little as $18.9/MWh.

Climatescope also revealed that clean energy dollars are flowing to more nations than ever. As of year-end 2017, some 54 developing countries had recorded investment in at least one utility-scale wind farm and 76 countries had received financing for solar projects of 1.5MW or larger. That’s up from 20 and 3, respectively, a decade ago.

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.

“European players, in particular, have moved aggressively to finance projects, particularly in Latin America,” said BNEF head of Americas Ethan Zindler, who helped found Climatescope. “While concessional capital is still clearly required in least developed countries or in others just beginning to adopt clean energy, elsewhere private funders appear quite comfortable deploying capital at volume.”

Climatescope 2018 represents the collective effort of 42 BloombergNEF analysts visiting 54 countries to collect data and conduct interviews.

Visit for further details and survey results.