COVID-19 to slow decarbonisation in emerging markets: BloombergNEF report

2019 was a good year for foreign direct investment in renewables; but the trend may not stick in 2020

By Ishan Kukreti
Published: Thursday 10 December 2020


The novel coronavirus disease (COVID-19) pandemic is likely to put a break on foreign direct investment (FDI) in renewables in 2020, according to BloombergNEF’s 2020 Climatescope findings released December 9.

While the figures for this year are not final yet, the report has pointed out steep drops in clean energy investment in emerging markets. This could hamper decarbonisation commitments of the energy sector in the coming years, it added.

BloombergNEF’s Climatescope is an annual comprehensive survey of energy transition in developing countries. 

“COVID-19 has badly damaged developing economies and slowed critical investment from abroad,” the report stated.

But 2019 was a good year for FDI in renewables: It reached a record high of $32 billion — up from a previous high of $24 billion in 2018 — according to the report. But the trend may not stick. 

Emerging economies accounted for 58 per cent ($144 billion) of the $249 billion in asset finance invested in utility-scale clean energy capacity worldwide during 2019. 

2019 trends

Three in 10 emerging markets installed more solar capacity than any other source in 2019. At least 69 markets built new utility-scale or small-scale solar in 2019. These markets funded these projects with over $48 billion.

Today, 95 markets have at least 10 megawatts (MW) of solar installed, the report said.

Renewables in India, excluding hydropower, account for a fourth of India’s 377 GW installed capacity; renewable capacity additions have exceeded additions from coal since 2017. 

While wind capacity additions of 2.25 GW in 2019 and 2018 were below 2017 levels, solar photovoltaic additions have risen every year since 2014. Solar power registered its best year to date in 2019 with 11.5 GW installed, the report said.

“This included utility-scale, rooftop and off-grid capacity. The 2019 decline in wind capacity additions was partly due to a switch in the market from reliance on feed-in tariffs to reverse auctions,” the report said. 

The report also stated that investment in clean energy in India fell to $8.5 billion in 2018-19 from $12.6 billion in 2017. 

The Indian government has set one of the world’s highest renewable energy targets of 175 GW by 2022 — 100 GW will come from solar; 60 GW from wind; and 15 GW from other sources.

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