The Bloomberg New Energy Finance 'Climatescope 2017' report finds that clean energy investments in developing countries decreased in 2016, as growth in renewable energy capacity accelerated.
Investment declined due to a mix of market risks, unclear policy environments and decreasing cost of wind and solar.
New off-grid solar contributed significantly to clean energy capacity additions in developing countries.
30 November 2017: The Bloomberg New Energy Finance (BNEF) Climatescope 2017 report finds that clean energy investments in developing countries decreased in 2016, due to falling prices, unclear policy environments and market risks, but it notes that growth in renewable energy capacity has nonetheless accelerated.
According to the report, investment in clean energy suffered its largest drop on record, declining 27% year-over-year decline between 2015 and 2016 to US$40.2 billion. While China represented three quarters of the downturn by volume, some of the steepest reductions occurred in non-OECD countries. The publication also finds that funds awarded for clean energy projects by development banks have stagnated, while OECD funds for projects in non-OECD nations declined by 26% to US$10 billion in 2016.
The study notes that some of the decrease in investment can be explained by the declining cost of solar and wind technologies, while indicating that energy policies and market risks have also resulted in reduced investment. The analysis finds that two-thirds of the countries studied had implemented a feed-in tariff or auction to support clean energy projects, but only 18% had domestic greenhouse gas (GHG) reduction policies. BNEF uses country scores based on clean energy market conditions and opportunities. This year’s average country score decreased for the first time since the publication’s launch four years ago, the report finds, noting however that the score is partially skewed by the addition of new, low-scoring countries.
In 2016 emerging market countries added 50% more solar capacity than 2015.
While clean energy investment has declined, BNEF reports increases in developing country clean energy capacity. The 71 emerging market countries included in the analysis added 34 GW of new solar capacity in 2016, a 50% increase over the 22 GW added in 2015. According to BNEF, reductions in photo-voltaic (PV) module prices and the advent of financing plans enabled by mobile payment solutions have supported an increase in off-grid solar projects in particular.
BNEF has published the Climatescope report once a year since 2012, assessing clean energy activities in developing nations. [Publication: Climatescope 2017] [Key Findings] [SEforALL Press Release] [Climate Action Press Release]