World at Peak Fossil Fuel Generation As Emerging Markets ‘Adopt’ Renewables: CEEW Report

Fossil fuel electricity generation has peaked worldwide as emerging markets seize the opportunities of low-cost renewables, a report published by India’s Council on Energy, Environment and Water (CEEW) and the financial think tank Carbon Tracker said.

Given renewables are already the cheapest source of new electricity in 90 per cent of the world, emerging markets (non-OECD countries plus Chile, Columbia, Mexico and Costa Rica) have no need to build up huge electricity infrastructure based on fossil fuels.

They are leapfrogging this stage and meeting growth in demand by deploying clean energy systems powered by wind and solar with huge potential to boost economic development and bring electricity to millions of more people.

Kingsmill Bond, Carbon Tracker energy strategist and report co-author, told IANS: “Emerging markets are about to generate all the growth in their electricity supply from renewables. 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.”

Arunabha Ghosh, CEO of CEEW and report co-author, said: “Around 770 million people still lack access to electricity. 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.”

Reach for the sun notes that emerging markets are key to the global energy transition, accounting for 88 per cent of all expected growth in electricity demand from 2019-2040.

In developed markets, demand for fossil fuels for electricity generation has fallen by 20 per cent since it peaked in 2007, and every country except two have reached peak fossil fuel demand for electricity.

The transition is different in emerging markets because they have electricity demand growth from a lower base as well as the need to provide access to hundreds of millions of people. Nevertheless, fossil fuel demand for electricity has already peaked or plateaued in 63 per cent of emerging markets ex-China, from Chile to Nicaragua, from Kenya to Thailand.

India, which accounts for nine per cent of emerging market electricity demand and 20 per cent of expected demand growth, illustrates the speed and scale of change.

From less than 20GW of solar in 2010, it has grown to 96GW of solar, wind biomass and small hydro in May 2021. Including large hydropower and renewables now provide 142GW or 37 per cent of the country’s power capacity, and it has a target of 450GW by 2030.

Demand for fossil fuel generation reached a plateau in 2018 and fell in 2019 and 2020. While fossil fuel demand might again increase in the near term to meet latent electricity demand, India has demonstrated how a double leapfrog—connecting nearly all households to electricity and its renewable energy rollout—can be driven with policy priorities and market design.

China, which accounts for nearly half of emerging markets electricity demand and 39 per cent of expected demand growth, is on the cusp of change, with solar and wind capacity growing at over 20 per cent each year.

Assuming electricity demand growth of four-five per cent and solar and wind supply growth of 20-25 per cent, fossil fuel demand for electricity in China will peak before 2025.

Vested interests are the key impediment to change. The report looked at the drivers of change and the barriers to change in the emerging markets and concluded that in most locations, the barriers to change were soluble.

It is vested interests in certain exporters and fragile states that are able to hold back change. But these will simply be the laggards of the energy transition.

Overall, 82 per cent of current emerging market electricity demand and 86 per cent of expected demand growth comes from countries that import coal and gas, and they have powerful incentives to switch to solar and wind.

With the right policies in place, technology and cost barriers to change can be crossed. The report also notes that renewables hold the key to meeting the UN’s goal of giving everyone access to affordable, reliable and sustainable energy by 2030.

Source : IANS