The market opportunity
Developing Countries drive energy demand and CO2 emission growth
Developing economies are expected to account for the vast majority of growth in global energy demand – and therefore also for an increasing amount of CO2 emissions – over the coming decades. Strong population growth, economic growth and a shift from agricultural to industrial economies are contributing to this fundamental change.
Renewable energy potential in developing countries
Renewable electricity (RE) generation accounted for 90 % of new power generation facilities that came online in 20151. An increasing amount of RE generation occurs in developing countries, with non-OECD members expected to attract over half2 of the USD 230 bn in average annual investments in new renewable capacity up to 20203.
The policy drivers for RE in developing countries – energy diversification, local pollution and fast-growing power demand – remain robust. For consumers, RE generation for self-consumption is often a reliable and affordable source of energy, especially given the declining costs of renewable generation and sometimes unreliable grid connections. The impact of the fall in oil prices on global renewable power deployment is lower than is often believed as power is generally generated from coal and natural gas.
Energy efficiency potential in developing countries
Non-OECD economies have a higher energy intensity than OECD economies, partially because they tend to be more focused on energy-intensive sectors such as industry4. Achieving the same output with less energy is key to sustainably meeting fast-growing energy demand.
Capturing the global energy efficiency opportunity will require global investments of around USD 50 bn a year for the next decade5.