Developing countries reportedly attracted more clean energy investment in 2014 building more wind, solar, and other renewable power generation.
Ahead of important round of climate talks scheduled end of this November in France, new study shows majority of 2014 clean energy investment, activity occurred in 55 developing nations, including Nigeria
According to a global assessment released two days ago, Nigeria climbed several places up the ranking, particularly because it had a higher amount of investment in 2014 than the year before.
It had the only other clean energy financing outside of Kenya and South Africa above $100 million in 2014, for 40 mega watts (MW) of small hydro.
Nigeria, according to Bloomberg New Energy Finance (BNEF) has gone through the most extensive reforms in Africa to liberalise its power sector and open it up to investors.
The report however observed that this has not yet translated into serious investment in renewables, however, following the elections, the government has proposed changes to the feed-in tariff for renewables that would make it much more attractive to investors.
The new policy drive is expected to make Nigeria become a more serious player on the Climatescope index in future years.
Climatescope, the clean energy country competitiveness index, interactive report, and online tool supported by the UK government, US government, and the Inter-American Development Bank Group offers a compelling portrait of clean energy activity in 55 emerging markets in Africa, Asia and Latin America and the Caribbean.
The group includes major developing nations China, India, Pakistan, Brazil, Chile, Mexico, Kenya, Tanzania and South Africa, as well as dozens of others.
News of the rising prominence of lesser developed countries comes on the eve of an important round of UN-organised climate negotiations kicking off in Paris at the end of November.
Those talks have often focused on the question of how much capital wealthier countries should make available to lesser developed countries to address the climate challenge.
Climatescope observed that for the first time ever, over half of all new annual investment into clean energy power generating projects globally went toward projects in emerging markets, rather than toward wealthier countries.
New investment in renewables soared in 2014 in the 55 Climatescope countries assessed to hit a record annual high of $126bn up to $35.5bn, or 39 percent, from 2013 levels.
The results were substantially bolstered by the remarkable growth in China, which added 35GW of new renewable power generating capacity all on its own – more than the 2014 clean energy build in the US, UK, and France combined.
Meanwhile, “South-South” investment (funds deployed in Climatescope nations from banks or other financial institutions based in those countries) surged to $79bn in 2014 from $53bn the year prior.
Continuing declines in clean energy costs appear to be driving growth as costs associated with solar photovoltaic power ticked down 15 percent year-on-year globally.
Solar is particularly competitive in emerging markets which often suffer from very high power prices from fossil generation while also enjoying very sunny conditions, the report said.
A total of 50.4 gigawatts (GW) of new clean capacity was built in Climatescope countries, marking a 21 percent uptick from the prior year.
In another first, renewables capacity deployed in emerging markets topped that in wealthier Organization for Economic Co-operation and Development (OECD) nations.
On a percentage basis, clean energy capacity is growing twice as quickly in Climatescope nations compared to OECD ones.
Progress in 2014 was achieved despite a number of countries in the survey seeing economic growth rates slow.
Average gross domestic product growth across Climatescope nations slipped to 5.7 percent in 2014 from 6.4 percent in 2013 with the slow-down most apparent in major nations, Brazil, South Africa, and China.
Despite the pullback, these three countries attracted a total of $103bn in new clean energy investment in 2014.
The Multilateral Investment Fund (MIF) of the Inter-American Development Bank Group (IDB), the UK Government Department for International Development (DFID), and the US Agency for International Development (USAID), under President Barack Obama’s “Power Africa” initiative, commissioned Bloomberg New Energy Finance (BNEF) to analyze and rank development prospects for solar, wind, small hydro, geothermal, biomass, and other zero-carbon emitting technologies (excluding large hydro).
The report provides potential investors with important information identifying countries with the greatest clean energy investment opportunities.
Climatescope was first developed in 2012 by the MIF/IDB and BNEF, and initially evaluated 26 countries in Latin America and the Caribbean. In 2014, it was expanded to include 19 countries in Africa, 10 in Asia, as well as 15 provinces in China and 10 states in India thanks to additional support from DFID and USAID.
A country’s ranking depends upon various factors: its clean energy investment policy, its market conditions, the structure of its power sector; the number and makeup of local companies operating in clean energy; and efforts toward reduction of greenhouse gas emissions.
The final output is the most comprehensive, one-stop source for decision makers to learn more about the market conditions for clean.