A New Era of Shared Clean-Energy Leadership Begins in China

There is a new reality in clean energy. The world’s major emerging economies – including China, India, and several others – are moving to the center stage of the clean energy transition. By betting heavily on energy efficiency, on wind, solar and other renewables, as well as other less carbon-intensive technologies, these countries are increasingly leading the way.This is the significance of the top-level meeting of energy ministers from the world’s biggest economies in Beijing next month. The fact that representatives from fossil-fuel producers like Mexico and Saudi Arabia will join renewable-energy pioneers like Denmark and Germany for a top-level meeting in China is not a coincidence. We are witnessing a global consensus that the key to the energy transition will reside with decisions made in emerging economies. There are many reasons to stand for clean energy today. These can range from reducing greenhouse gas emissions but also battling the scourge of air pollution, improving energy security by reducing the dependency of fossil fuels, diversifying supply, creating high-tech jobs or fostering innovation. As such, approaches to clean energy will vary from country to country.According to the International Energy Agency, all of the projected growth in energy demand in the next 25 years will take place in emerging and developing countries. This means that implementing the right kind of policies and technologies will be critical to ensure stable supplies as well as meeting desirable environmental outcomes.The good news is that this is happening. India was the first country to set comprehensive quality and performance standards for light emitting diodes (LEDs), and it expects to save as much as 277 terawatt-hours of electricity between 2015 and 2030, avoiding 254 million metric tons of CO2 emissions or the equivalent of 90 coal-fired power plants.Another upshot is that by committing to these new clean technologies, countries like China are helping drive down costs for the benefit of the world. China is now the undisputable global leader of renewable energy expansion worldwide, and the IEA forecasts that by 2021, more than one-third of global cumulative solar PV and onshore wind capacity will be located in China.Recently announced renewable projects have broken new records, with power purchase agreements for several onshore wind and large solar PV farms now below USD 50/MWh. In Mexico, the average price of the long-term auctions in October 2016 was 33.5 USD/MWh, a level that is extremely competitive, even if wind and solar power are not always generating. Similar figures can be found in several Latin American countries, Middle-East and African countries.