Emerging markets are set to eclipse developed nations next year in their capacity to generate wind and solar power as equipment costs fall and the energy market approaches “peak coal”, according to Moody’s, the credit rating agency. While developed countries have long been leaders in renewable power generation, emerging economies are close to overtaking them, bringing their total installed capacity of wind and solar to 307GW and 272GW – respectively 51 per cent and 53 per cent of global capacity, according to Moody’s calculations. China accounts for the lion’s share of the upsurge. But Middle East and north African countries are scheduled to have installed 14GW in solar plants by the end of 2018 – a seven-fold increase from 2015. Central and South America are also expected to reach 14GW, nearly five times more than in 2015, while India is set to hit 28GW, a jump of nearly six times. “Everyone knows the cost of installing solar and wind energy has been coming down, but recently we have seen prices hitting extreme lows in places such as Mexico, Chile, India and Abu Dhabi,” said Swami Venkataraman, senior vice-president at Moody’s Investors Service. “This fall in costs is definitely changing the calculus of [emerging market] governments, allowing them to pursue renewables much more aggressively,” he added. Another factor is the onset of “peak coal” in the energy market. In 2013, the US Energy Information Administration projected that world coal demand would rise 39 per cent by 2040. Now it is expecting growth of just 1 per cent.
FT 25th Sept 2017 read more »