Renewable energy is in the spotlight more than ever as the Iran war pushes Europe towards an oil and gas crisis.
While Italy is postponing the permanent shutdown of its coal-fired power plants, Spain’s electricity price is proving relatively stable thanks to doubling its wind and solar capacity since 2019.
A recent analysis by SolarPower Europe found that harnessing sunlight for energy has saved Europe more than €100 million per day since 1 March, resulting in total savings of more than €3 billion.
Even so, electrotech – such as solar, battery storage, and electric end-use technologies – has for a long time been a non-viable option for low-income countries due to higher upfront costs.
However, a new report from energy think tank Ember has found that a recent shift could bring renewables to the billion people left behind by the fossil fuel system.
Emerging economies’ electrification struggle
Smaller emerging economies have long struggled to climb the energy ladder. More than 700 million people still have no electricity, and many of those connected face frequent outages, according to the Ember report.
The challenge is most visible in the 74 member nations of the Climate Vulnerable Forum (CVF). Together, they are home to over a fifth of the global population but account for under five per cent of global GDP and electricity demand.
“The conventional fossil-based development model has failed to reach them at scale,” the report says. “For countries with limited state capacity and high borrowing costs, this lumpy, centralised, capital-intensive fossil path has always been a tall order.”
‘An epochal shift’
According to Ember, a different path is now available as cheaper electrotech reshapes the economics of energy in these markets.
“It has long been argued that the only path to economic development needs fossil fuels. But the current energy crisis has again exposed how fragile that path is, especially for emerging economies that spend billions each year on fuel imports,” says Daan Walter, Principal of Ember Futures.
“The difference today is that a credible alternative development path exists: electrotech is now cheaper, widely available, easily scalable, and offers the prospect of energy independence and abundance to drive growth.”
Solar now requires less upfront capital than fossil fuels, whereas a decade ago it required up to five times more.
Off-grid solar-battery systems already beat grid extension for communities more than a few dozen kilometres from existing lines. Electric end-use technologies, from heat pumps to e-scooters, have fallen in price by 30–95 per cent over the past decade.
According to Ember, electrotech adoption in CVF nations is rising fast. Around half of CVF nations, measured by electricity demand, have already surpassed the United States in solar penetration, and half in electrification.
“This is an epochal shift in humanity’s energy story, and vulnerable developing countries are at the heart of the increasingly rapid electrotech transition towards clean energy futures and climate prosperity,” says Sara Jane Ahmed, Managing Director and V-20 Finance Advisor of CVF-V20.
