Developing economies move away from fossil fuels in clean energy surge -- continued investment will ensure they become renewable energy powerhouses

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RMI

15 Oct, 2024, 14:09 GMT

Developing countries can catch up with rich nations' renewables deployment within five years

NEW YORK, Oct. 15, 2024 /PRNewswire/ -- New analysis from RMI finds that renewable energy deployment is growing faster in developing and emerging economies than in advanced economies, with some developing countries overtaking Western counterparts.

It shows that 3/4 of developing economies' energy demand is in the 'sweet spot' of change based on their level of fossil fuel imports, income and available renewable resource. The research finds these developing economies* - across Latin America, Africa, South Asia and Southeast Asia - display key traits and trends:

  • Investment pivot: 87% of power investment is flowing into cleantech in 2024 already, up from around half 10 years ago.

  • Exponential renewable growth: Solar and wind generation is rising at an average rate of 23% a year for the past five years, while by 2030 they could be adding as much renewable capacity as developed economies.

  • Cost tipping point: Cost parity has opened the door to faster change with the halving of solar and battery costs in 2023, meaning the upfront cost of solar has fallen to the same level as fossil generation - even without counting the cost of supplying the fossil fuels.

  • Lowest fossil fuel reserves and production per person in the world: Energy security is a key concern for 4/5s of developing nations who lack domestic oil & gas resources, while 70% of the world's renewable resources sits with developing economies. 

  • Fossil fuel peak: Demand for fossil fuels has peaked already in a third of developing economies, while it's set to peak in electricity by 2030.

As a result, these developing and emerging economies are currently only five years behind the clean energy transition underway across advanced economies in aggregate, with solar and wind already accounting for 9% of the power mix.

Vikram Singh, Sr. Principal Global South, RMI said: "Ramping up large-scale clean energy investment in developing countries will super-charge economic growth, increase energy security and drive greater energy access. It's also a critical part of meeting the global COP28 goal of tripling renewables and doubling energy efficiency. Now the world faces a clear choice - either support developing nations to seize the opportunity of exponential clean energy growth or risk missing our last chance to keep 1.5C within reach."

Media: Leah Komos, lkomos@rmi.org