Fossil fuel electricity generation has peaked worldwide as emerging markets seize the opportunities of low-cost renewables.

The claim comes from a report published by India’s Council on Energy, Environment and Water (CEEW) and Carbon Tracker.

The report, Reach for the Sun, argues that renewables are already the cheapest source of new electricity in 90 per cent of the world, thus emerging markets (non-OECD countries plus Chile, Colombia, 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 more people.

Kingsmill Bond, Carbon Tracker energy strategist and report co-author, said: “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.”

However, it also warns that vested interests are the key impediment to change. The report looks 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.

A supportive policy environment is the key to driving growth in renewables. If countries liberalise markets and introduce competitive auctions, they can cut costs and attract international finance as capital markets turn their backs on fossil fuels.

Developed countries can speed up the transition to renewables in emerging markets by providing policy support, technology expertise and by using development finance to reduce the cost of capital. The report says it is in their interests to do so, in order to support global climate targets, and for geopolitical reasons as the US seeks to counter growing Chinese influence.

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