Will developing countries emerge as leaders in the renewable energy race?

by Lauren Cameron

Developing countries, by nature of definition, have typically fallen behind the rest of the pack in terms of access to education, healthcare, GDP growth and the development of essential infrastructure. They have been but a burden to the rest of the world; a plight to which wealthier neighbours channel empathy – and funding. Regions where disease, poverty, debt and illiteracy have been rampant more often than they have not. But in one particular area that dynamic is changing.

Lateral power is beginning to transform the developing world, with the democratization of electricity in such regions the premise of a potential new paradigm in global power dynamics. While the First and Second Industrial Revolutions were centred upon centralised energy grids and systems requiring massive amounts of capital, investment, control and geopolitical management – meaning poorer countries were largely excluded and struggled to gain equitable access – the Third Industrial Revolution (the shift toward solar and energy efficiency) will push aside hierarchical power interests and fossil fuel-based companies, instead giving rise to smaller renewable energy producers and lateral energy distribution. For the first time in history, the underdeveloped world’s lack of infrastructure will be their asset as opposed to their disadvantage, simply because it is easier to build from scratch using newer technologies than it is to overhaul existing infrastructure.

In 2015 we saw developing countries’ investment in solar, wind and geothermal energy resources overtake that of developed countries for the first time, with China, India, Costa Rice and Brazil among the leading investors. A total of about £196.5 billion was spent on renewable power globally in what was a record year for investment in the sector, according to the Renewables 2016 report by the Renewable Energy Policy Network for the 21st Century – and China played a dominant role in this, increasing its investment by 17 per cent and accounting for an astonishing 36 per cent of total global investment. China is the largest global investor in solar power today, with an ambitious solar PV target of 213 GW by 2020 – a doubling of its previous target total, and ten times the current installed capacity in the United States.

But while renewable energy investment soared in India, South Africa, Chile, Morocco and the Philippines in 2015, it declined by eight per cent in developed countries as a group, to around $130 billion. The decline in recent years has mainly been seen in the EU and United States, a trend which will likely be exacerbated by the new Trump administration’s stance on climate change and renewable energy.

The introduction of solar, wind, geothermal, hydro and biomass harvesting technologies throughout developing regions is a promising sign of things to come. Costa Rica plans on becoming the first developing country to use 100 percent renewable electricity, with its citizens embracing the shift to solar panels, wind turbines and bio-energy, while the Indian government has announced a target of 175GW in renewables by 2022, 100GW of which will be solar. Kenya is set on becoming the first country on the continent to use geothermal power, with the largest current installed capacity at 200MW, and Africa; Asia and Latin America are seeing the rapid expansion of small-scale renewables, including mini-grids which will serve to provide electricity to people living off the grid. People who were once effectively shut off from such services will now be able to pay-as-they-go, with solar becoming increasingly increasingly affordable to people earning less than $2 daily. Investment in off-grid solar services like these are helping such communities in ways that many non-profits have failed. Using payment systems based on mobile technology and wireless networks, these innovations are allowing people without bank accounts or jobs to pay-as-they-go for solar services, bringing light to some of the darkest corners of earth.

With the average off-grid Kenyan spending roughly $272 a year on energy needs, the possibility of saving $750 over four years by switching to an off-grid solar kit is incredibly tempting. One company bringing these services to rural Kenyans, M-Kopa, sells a solar kit that costs $200. Customers make a one-time upfront payment of $35 and then commit to a 45c payment every day for the next two years until the kit is fully paid off. It comes with a two-year warranty and its battery is designed to last at least four years. Tanzania-based start-up Off Grid Electric offers a similar off-grid product. It is innovations like these that will go on to fuel rapid development in coming years in places that until now have not had basic infrastructure, provided those communities are prepared to keep up.

The reality of the situation is this. In the coming decade, wind, solar and marine technologies will come to dominate global energy markets. Those countries already on board with the change – or those already demonstrating ambition and innovation in line with such growth – will be poised for global domination. Already we are seeing signs that it could be developing world who will emerge as leaders, leapfrogging the more developed countries. And, considering that by 2030 it is estimated that 96 percent of all urbanization will occur in the developing world, perhaps this is for the best.

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