Climatescope 2023 highlights
Climatescope is BNEF’s annual assessment of energy transition opportunities around the world. Now in its 12th year, the project surveys the power, transport and buildings sectors in 140 developing and developed markets. The 2023 edition also boasts a new deep dive into in the correlation between effective policy mechanisms and renewable energy investment.
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Total energy investment over the last five years in $ billion, and how it relates to Climatescope’s Fundamentals score.
The Fundamentals score encompasses an economy’s key policies and market structure – as well as barriers that could hinder investment. In this case, investment includes new-build asset finance and small-scale solar.
The US and China
Mainland China received 52% of all renewable energy investment in 2022, while the US came in a distant second with 9%. The two economies are also home to half of the global solar capacity added last year.
Developing versus developed markets
Over the past five years, the majority of clean energy investment was directed to developed markets, while only 29 developing markets (excluding mainland China) attracted more than $2 billion each.
Emerging markets
The 15 emerging markets that finished at the top of the Climatescope scoring table have received an average of $34 billion in cumulative investment over the last five years.
15 lowest ranking markets
The 15 markets that finished at the bottom of the ranking attracted just $291 million on average in 2022. In particular, these markets’ low policy scores reveal the key role policies play in mobilizing clean energy asset finance.
Lowest ranked African markets
Out of the 15 lowest scores in the Fundamentals parameter, 11 are assigned to markets in Africa, as many of these have yet to implement the necessary policies that would propel their power sectors toward a cleaner and more sustainable future. Among regions, Africa has the lowest adoption of renewable energy policies, and only 24% of its markets have at least three mechanisms in force.
Developing markets surveyed by Climatescope where key renewable power policies are present, 2021-2023
Diversifying investment across emerging markets is difficult without environments that are attractive to these financial flows. Passing effective policies and developing a mature, transparent power market that is open to private players are two ways to render a market more conducive to clean energy investment.
Renewable energy targets (2021 vs 2023)
The last decade was marked by notable surges in climate ambitions, with markets consistently improving their renewable energy targets and pledging to accelerate carbon emission reductions. In 2023, 93% of the emerging markets covered by Climatescope have renewable energy targets in place. Yet only 40% of these are on track to hit their targets’ half-way marks, even though most of these goals are set to come due in 2030.
Auctions (2021 vs 2023)
Reverse auctions for clean power delivery contracts have proved to be one of the most effective policies for spurring renewable energy build. As of 2023, 63 of the 110 emerging markets surveyed in this report have auction mechanisms in force.
Feed-in tarrifs (2021 vs 2023)
Feed-in tariffs are the only type of policy losing ground. In 2023, they are available in just 28%, or 32, of the emerging markets surveyed, compared with 30% in 2022. Twenty markets have both feed-in tariffs and auctions.
Net-metering (2021 vs 2023)
Net metering is now present in 59% of emerging markets, compared with 49% in 2021. This growth pattern is helping distributed solar spread to more markets.
Power Transition Factbook
This marks the 12th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. In recent years, the project has been expanded to include activity not just in clean power, but also in the decarbonization of transportation and buildings.
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