Methodology

The Climatescope 2025 methodology includes over 149 indicators and sub-indicators split among three key topic areas. Together, these encompass each market’s clean energy landscape, including previous accomplishments, current investment environment, and future opportunities for growth.

Fundamentals encompass a market’s key policies and market structures that impact investment or deployment. This includes the fundamental structures that can help – or act as a barrier to – the deployment renewable power.

Opportunities examine a market’s potential to grow its supply of renewable power. This topic considers the conditions, environments and price points that offer the best opportunities for clean-power growth.

Experience takes into account a market’s achievements to date. Markets with greater experience deploying renewable power capacity typically offer lower risks, lower technology costs and lower costs of capital for developers. This parameter also includes historical deployment of clean technologies surveyed and growth rates of investment into the sectors.

It is important to note that several key indicators that contribute to the above parameters are “levelized” against a market’s gross domestic product, population, installed capacity and generation. This is designed to recognize – and neutralize – the fact that some markets attract larger volumes of capital simply because they are bigger. For a complete description of Climatescope’s updated methodology, visit BloombergNEF's website, or see the latest Climatescope report.

Parameters and Indicators

Below is a complete list of indicators used in the Climatescope Power ranking. These are subdivided first by parameter and category.

Climatescope data is collected based on a list of indicators and sub-indicators that are tied to specific questions to guide analysts during data collection and to ensure transparency for clients regarding what is being evaluated. The scope of the indicators includes policy frameworks, power market structures, investment levels, barriers to clean energy and other enabling or limiting factors for clean energy deployment.

Policy:

Renewable energy

• Auctions/tenders (utility-scale): Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. Renewable energy auctions or tenders are transparent competitive processes used to establish long-term contracts between energy generators and consumers. In the renewable energy sector, auctions are used to introduce competition among potential power producers and allow for a more efficient allocation of capital.
• Renewable energy target: Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. A renewable energy target is a medium- or long-term goal for the total clean power consumption, generation, or installed capacity that a market aims to reach by a specific year. Renewable energy targets are set by the government and are typically published in energy laws, national plans, strategies, or Nationally Determined Contributions – market’s plans to help achieve the goals of the Paris Agreement.
• Feed-in tariff/premium (utility-scale): Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. A feed-in-tariff or premium is an above-market price payment given to renewable energy producers for the electricity that they deliver to the grid.
• Support for customer-sited generation (rooftop and self-consumption): Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. Net metering (or net billing) allows retail electricity consumers to install self-generation facilities (typically distributed solar panels), interconnect with the electricity utility and deliver surplus power generation to the grid. Consumers typically obtain compensation in the form of billing credit or direct payments.
• Tax incentives: Rewards markets that have import tax or VAT reduction/exemption in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. Import tax reduction or exemptions for renewable energy aim to lower or eliminate import duties paid on components used to build clean energy power projects.
• Renewables mandate/REC: Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. A renewable energy certificate (REC) is a voluntary market instrument that certifies that power was produced by a renewable energy source. A certificate is issued for each megawatt-hour of electricity delivered to the grid and is typically either bundled with and priced into a power purchase agreement or sold to entities aiming to offset their emissions. While there is policy support to maintain the structure, it is purely a corporate commitment on either side, buyer or seller. ‘REC’ is the name of such certificates in the US, and they can more broadly be called ‘energy attribution certificates’ (EACs). Essentially, I-Recs, Guarantees of Origin and other national certificates are EACs used for tracking, but their scope varies depending on regulation and the market of use (such as the example of US RECs and some utilities).

Climate change

• Fossil-fuel phaseout policy: Considers fossil-fuel phaseouts related only to the power sector.
• NDC target – Type: Rewards markets that detail their emission reduction goals in absolute terms the most, followed by those that use emission intensity targets. Markets that propose to reduce emissions against a historical trend receive the least points.
• NDC target – Coverage: Rewards markets based on the number of sectors that are covered by their emission reduction goals.
• NDC target – Last update date: Rewards markets that have updated their NDCs or submitted a new document since 2019.
• Long-term strategy: Rewards markets that have submitted their long-term strategy detailing how they will reduce emissions to the United Nations Framework Convention on Climate Change.
• Net zero: Rewards markets that have a net-zero emissions target in force, in the legislative process or under discussion.

Storage

• Energy storage target: Rewards markets that have this policy in force with national legislation. An energy storage target is a medium- or long-term goal set by the government to promote the deployment of energy storage technologies. These targets may define specific capacity goals (in MW or MWh) or storage shares in the power mix by a certain year. They are typically published in national energy plans, climate strategies, or renewable integration roadmaps, and aim to support grid flexibility, reliability, and renewable energy integration.
• Energy storage incentives: Rewards markets that have an energy storage subsidy providing direct or indirect financial support to incentivize the adoption of energy storage systems. These mechanisms can include investment grants, tax credits, rebates, or low-interest loans for developers and consumers. Such subsidies aim to reduce upfront costs, accelerate market uptake, and enhance grid stability by facilitating greater storage deployment.

Grid

• Priority generation dispatch: Rewards markets that have this policy in force, be it national or at the state or provincial level, with national legislation accounting for a higher score. Priority access means the grid operators at the distribution level are obliged to connect to renewables installations. In an overload situation, the connection of renewables is prioritized instead of fossil fuels.

Renewables procurement:

• Gap to target: Rewards markets where the gap that remains to achieve clean energy deployment goals is largest.
• Upcoming auctions: Rewards markets where volumes of upcoming clean energy auctions are largest.

Power sector:

Power market structure

• Utility unbundling: Rewards markets where the generation, transmission and retail segments of the electricity sector are separated.
• Utility privatization: Rewards markets where generation, transmission and/or retail of electricity are open to private sector participation. The generation segment is worth twice as many points as transmission and retail, which often remains the prerogative of public entities and is not a barrier to clean energy investment.
• Concentration of generation market: Rewards markets in which the electricity generation market is not concentrated.
• Wholesale power market: Awards points to markets where electricity dispatch is done on a marginal-cost basis and where a wholesale power exchange is in place.
• Retail market liberalization: Awards points to markets in which the retail of electricity is open to competition and where developers can sign power purchase agreements (PPAs) directly with consumers.
• Capacity payments: Rewards markets where capacity remuneration mechanisms are in place to ensure adequate generation availability. These mechanisms compensate generators for maintaining reserve capacity in addition to energy output.
• Permit exemption threshold (MW/kW): Rewards markets with clear and transparent thresholds under which small-scale or distributed generation projects are exempt from permitting requirements.

Demand

• Purchase obligation: Rewards markets where the electricity off taker is mandated to purchase all electricity produced by renewables developers.
• Standardized PPAs: Awards points to markets where standardized PPAs can be used by renewables developers to accelerate negotiations.
• Duration of other PPAs: Rewards markets based on the length of PPAs that are typically awarded to renewables developers, giving more points to longer-term PPAs.
• Currency of other PPAs: Awards points to markets where developers can sign PPAs that guarantee payment for power delivered in US dollars or euros.
• Bilateral power contracts: Rewards markets where commercial and industrial customers can sign both on- and off-site long-term contracts for clean energy.

Grid

• Power grid privatization: Rewards markets that allow or have implemented private ownership or operation of transmission and distribution infrastructure.
• Transparent grid extension plan: Rewards markets that regularly publish detailed and transparent plans for grid expansion and reinforcement.
• Transparent grid node capacity: Rewards markets where grid operators regularly publish detailed and transparent information on available and allocated capacity at each grid node.
• Grid connection queue size: Rewards markets with short, efficiently managed queues for grid connection applications.
• Generation grid connection: Rewards markets with transparent, standardized, and timely grid connection procedures for new generation assets.

Decentralized energy:

• Energy access – Initiatives: Rewards markets that prioritize the development of solar home systems and mini-grids, and grid expansion to improve energy access and rural electrification.
• Energy access – Targets (general): Rewards markets where an energy-access target is in place.
• Generation license: Rewards markets that allow the development of residential and commercial solar systems and mini grids for self-use.
• Mini-grids: Site specifications: Rewards markets where the government has specified geographical locations for mini-grids development.
• Tariff deregulation: Rewards markets where off-grid developers can structure the tariffs they charge for their electricity themselves.
• Mini grids: Clear rules on arrival of the main grid: Rewards markets with clear rules on the sanctity of private assets developed in regions where the main power retailers, such as state-owned utilities, are not yet active. Typically, these rules involve the state or utility being required to purchase the private asset at a fair market value, or the asset being granted independent power producer status within the grid. Such policies help protect privately developed mini grids built where the grid does not yet exist.
• PAYG availability: Rewards markets where ‘pay-as-you-go’ solar technology is available.
• Retail license: Rewards markets that allow owners of residential and commercial solar systems and mini grids to sell electricity directly to consumers.
• Time-based tariffs: Rewards markets that have time-based tariffs for residential customers in place.

Flexibility

• Co-located PPAs: Rewards markets that have co-located renewable energy power plants, such as wind or solar-plus-storage power purchase agreements (PPAs).
• Peaking capacity procurement: Rewards markets in which peaking capacity is procured through a competitive process.
• Batteries for peaking capacity: Rewards markets that allow batteries to provide peaking capacity.
• Grid balancing issues: Rewards markets that have programs to address grid balancing issues resulting from the addition of new renewable capacity.
• Grid balancing programs: Rewards markets that have programs to address grid balancing issues.
• Grid balancing further grid balancing options: Rewards markets that have other solutions to address grid balancing issues.
• Storage-specific regulatory framework: Rewards markets that have a storage-specific regulatory framework.

Ancillary services

• Ancillary services procurement: Rewards markets that promote competitive processes for ancillary services.
• Ancillary services compensation: Operations beyond gen. and transmission needed for grid stability/security. Services include frequency control, spinning reserves and operating reserves.

Barriers

Grid

• Curtailment risk: Rewards markets where renewable generators face low curtailment rates.

Decentralized energy

• Barriers - Decentralized energy - Other barriers: Rewards markets where there are no other barriers (such as business licensing requirements) that hinder the development of decentralized energy projects or retailing off-grid products.

General

• Local content requirements: Rewards markets there the government imposes requirements on developing/owning a renewables project.
• Energy transition barriers: Markets where regulatory, financial, or infrastructure obstacles make it harder to deploy clean energy or attract private investment.
• Data transparency: Markets where energy and investment data are not easily accessible, consistent, or regularly updated, making it harder to assess performance and policy outcomes.

Demand

• Offtaker risk: Rewards markets where the offtaker – public or private – is the least likely to default or delay payments to renewables developers.
• Offtaker credit enhancement for renewables: Rewards markets where the offtaker offers credit-enhancement measures for renewable energy projects.
• Debt raising: Rewards markets where renewable energy developers can access debt financing through stable and well-developed financial institutions.
• Finance support: Rewards markets that provide effective public or blended finance instruments to de-risk renewable energy investments.

Decentralized energy incentives

• Decentralized energy financing organizations: Rewards markets where specific funds are available to finance decentralized energy companies or projects.
• Rural electrification program: Rewards markets with detailed rural electrification programs in place.
• SPPs can deliver financial services: Rewards markets where small power producers (SPPs) can offer financing solutions to their clients to reduce upfront costs and grow the market.

Price and costs

• Kerosene and diesel subsidies: Rewards markets that have reduced or eliminated subsidies for kerosene and diesel.
• Power price subsidies: Rewards markets where electricity prices reflect generation and delivery costs, without distortive subsidies that favor fossil-fuel consumption.
• Fossil-fuel price distortions – Subsidies: Penalizes markets that maintain significant subsidies for fossil fuels.
• Fossil-fuel price distortions – Taxes and carbon prices: Rewards markets that internalize fossil-fuel through taxes.

Capacity and generation

• Clean energy installed capacity
• Clean electricity generation excl. large hydro
• Five-year growth rate of clean electricity generation
• Five-year growth rate of clean installed capacity

Carbon intensity: Measures the amount of carbon dioxide (CO2) emitted per unit of electricity generated, typically expressed as grams of carbon dioxide per kilowatt-hour (gCO2/kWh). It reflects how clean or polluting a market’s power mix is.

Market Size

Growth rate of peak demand

Electrification rate – national

Demand dynamics

• Reliability of power supply: Markets where the power system can consistently meet demand without frequent outages or curtailments.
• Cola plant pipeline: Markets where new coal-fired power plants are planned, under construction, or recently commissioned, affecting the pace of the energy transition.
• NEO 10-year demand growth projections: Markets where BloombergNEF’s New Energy Outlook projects strong or weak electricity demand growth over the next decade, shaping investment opportunities and capacity needs.

Corporate commitments: Tracks pledges and targets made by companies related to renewable energy procurement or emissions reductions. This helps assess the role of the private sector in driving the transition.

GDP growth – Five-year IMF outlook: Based on the International Monetary Fund’s medium-term projections, this indicator provides expected average annual growth of real GDP over the next five years.

Finance

• Foreign investment
• Clean energy investment
• Five-year growth rate of clean energy investment
• Currency variation: Refers to the fluctuation in the value of a local currency relative to the US dollar.
• Inflation: Penalizes markets experiencing high or volatile inflation rates.