Private capital is embracing green energy projects across the developing world, but more investment is needed to see countries reject coal one and for all.
UNITED NATIONS – A new report finds that investment in clean energy technologies across the developing world has now surpassed clean energy investment in the world’s richest countries — a sign that renewable projects are increasingly seen as financially viable whether they’re in France or French Guiana.
Luiza Demoro is an associate at Bloomberg New Energy Finance and lead analyst of the “Climatescope” report:
“This is where the population is going quickly and demand is growing quickly, while developed countries, OECD countries, demand is almost flat.”
Demoro says that flat energy demand in places like western Europe has led major European utilities to look elsewhere for investment. Ten years ago those companies might have worried about the economic viability of a wind or solar project in Africa or Latin America. Now, things have changed.
“Before we would see only development finance institutions such as the World Bank providing capital to finance clean energy in developing countries. Once those projects came online and proved that they’re actually making lots of money, then project developers and private investors felt comfortable to do the same.”
That investment boom has been so transformative that in parts of Asia and Latin America renewable energy is now cheaper to produce than fossil fuel energy. That’s undoubtedly a good thing, but only a first step, since developing countries are still building and operating coal power plants.
To stop that, Demoro says even more green investment is needed to keep driving clean energy prices down.
“At some point, all this coal capacity that is a big issue will need to be replaced, and that’s more expensive because you need to compare the price of running a coal plant to building a new wind and solar plant. Without private capital that will never happen.”