770 million people globally lack access to electricity. They’re predominantly in developing nations. Despite international commitments to energy equity, like the UN Sustainable Development Goals, the dominant view is that electricity access for these folks will be a slow and expensive process.
On July 14th, the Carbon Tracker Initiative published a report titled Reach for the Sun, which challenges this view. They forecast that 88% of the growth in global electricity demand between 2019 and 2040 will come from emerging markets. Moreover, demand for fossil fuel generation in those markets has already, or is about to, peak. Those countries are investing in renewables.
They divide the emerging markets up into four groups:
- China, which is nearly half the demand for electricity, and 39% of the expected growth.
- Coal and gas importers, such as India or Vietnam, which account for 1/3 of the demand for electricity, and nearly half of the growth.
- Coal and gas exporters, like Russia and Indonesia, which are 16% of the electricity demand, but only 10% of the forecast growth.
- Fragile states, like Nigeria and Iraq, which account for 3% of demand, and about the same percentage of growth.
Carbon Tracker makes the case that emerging markets will leapfrog developed nations in renewable energy deployment as they modernize their economies. With little to no legacy generation infrastructure in place, it makes sense to build out with renewables. Moreover, the added attraction of energy independence makes this a strongly preferable path.
Developed nations in North America and Europe have the disadvantages of:
- Sunk costs in the form of coal and gas generation infrastructure.
- Political headwinds as vested interests in fossil fuel industry players work against renewables.
- Economic headwinds slowing down deployment of renewables as comparitively low growth in demand makes financial cases difficult.
The report is tremendously detailed. There is much to digest here.
The most extraordinary takeaway for me, though, was the similarity between 19th century colonialism, and today’s oligarchy of fossil fuel producing businesses and nations. Colonialism is the control of one group of people by another, generally by establishing colonies of settlers, for the purpose of economic exploitation. Developing nations export raw materials, and in some cases finished goods to the West. Energy independence is an inarguable benefit for them. Yet Western interests have actively sought to thwart renewable deployment in developing nations in order to continue to extract energy “rents” from these economies.
Is this modern colonialism? You tell me.