Emerging economies on course to ‘leapfrog’ fossil fuel power infrastructure and move straight to renewables-dominated grids, according to new analysisfrom Carbon Tracker and India’s CEEW
Fossil fuel electricity generation has now peaked worldwide, as emerging economies increasingly seize the economic and societal benefits of low-cost renewable energy sources, according to influential think tank Carbon Tracker and India’s Council on Energy, Environment and Water (CEEW).
The buoyant assessment comes in fresh analysis today by the two non-profit organisations, which asserts that renewables are already the cheapest source of new electricity in 90 per cent of the world, enabling emerging markets to “leapfrog” coal, gas, and other forms of fossil fuel power and move straight to clean energy systems.
Non-OECD countries, as well as Chile, Colombia, Mexico, and Costa Rica, have no need to build up significant fossil fuel infrastructure in order to meet growing domestic demand for electricity, the report argues, as green alternatives such as wind and solar are far cheaper and offer better economic outcomes.
Leapfrogging fossil fuel infrastructure in the developing world and going straight to clean energy is also crucial for meeting global climate targets, with 88 per cent of all expected growth in electricity demand over the next 20 years expected to come from emerging markets, the report notes.
The report also highlights how in developed markets demand for fossil fuels for electricity generation has already fallen 20 per cent since its 2007 peak, and every country except two have now reached peak fossil fuel demand for electricity.
But now the same trend is beginning to appear in emerging markets as well, the report asserts, with fossil fuel demand having already peaked in 63 per cent of emerging economies, excluding China. Overall, the analysis expects fossil fuel demand in emerging markets to peak as early as 2025.
“Emerging markets are about to generate all the growth in their electricity supply from renewables,” said Kingsmill Bond, Carbon Tracker energy strategist and report co-author.
“The move will cut the costs of their fossil fuel imports, create jobs in domestic clean power industries, and save millions of lives lost to fossil fuel pollutants.”
Moreover, meeting growing demand for electricity with renewables in emerging markets offers huge potential to boost economic development and bring electricity to millions more people worldwide, in line with the UN’s goal for everyone to have access to affordable, reliable, and sustainable energy by 2030, according to report co-author Arunabha Gosh, CEO of CEEW.
“Around 770 million people still lack access to electricity,” he said. “They are a small share of forecast growth in electricity demand but the international community has a moral obligation to support universal electricity access as the basis for achieving many other sustainable development goals.”
However, vested fossil fuel interests within certain exporter countries and “fragile states” still remain a potential barrier to emerging markets ‘leapfrogging’ high carbon energy infrastructure, the report warns, noting that the transition to a global clean energy system could be slowed as a result.
Support for fossil fuel infrastructure remains widespread in a number of key economies, despite the significant and growing stranded asset risks faced by regions that continue to build fossil fuel power capacity.
China alone could face more than $16bn in stranded assets by 2030 if coal plants continue to be built, if it fails to learn the lessons from a European power sector that has already written down $150bn of assets after fossil fuel demand peaked in 2007, the report warns.
Overall, the report concludes that fossil fuel power laggard countries will be “too small to stop the global shift” towards clean electricity systems.
But it also argues that a supportive policy environment is crucial to driving growth in renewables worldwide, highlighting how liberalised markets and competitive renewables auctions have helped to cut costs and attract international finance as markets turn away from fossil fuels.
The analysis follows the International Energy Agency’s (IEA) landmark report earlier this year, which concluded that no new sources of oil, gas or coal should be developed beyond 2021 if the world is to stand a chance of achieving net zero emissions by mid-century.
“There is little dispute that OECD demand [for fossil fuel electricity generation] will continue to fall” today’s report states. “If emerging markets ex-China have demand that is flat and then falling, then the only driver of growth is China.
As we have seen we can expect a few more years of growth before Chinese demand for fossil fuels also falls. So the balance is simply decline in the OECD versus growth in China. If OECD decline is faster than Chinese growth, then total demand will fall.”
Originally published at Business green