Numerous economic imbalances have defined Global North-South relations for centuries. Fossil fuels are one. Europe harnessed coal and the United States oil to dominate the globe the last two centuries. Despite having 80% of global oil reserves, OPEC could not compete with U.S. and Russian production this past decade. Could an emerging renewable energy duality, namely wind and large-scale solar power, create a more level playing field between the developed North and developing South?
Recent developments in renewables may be doing just that. In the North, wind power is growing spectacularly fast. Last year, onshore wind overtook hydro as the dominant renewable energy source for power generation in the United States. Wind is already number one in Europe, with large offshore plants scheduled to come online in the early 2020s. Meanwhile, in the South, large-scale solar is surging. According to the International Energy Agency (IEA), renewable energy power generation will grow by 50% from 2019 to 2024. Solar PV will account for 60% of this growth. In 2019, developers commissioned 35 new solar projects of at least 200 megawatts, a 17% increase from 2018.
Coronavirus (COVID-19) could also accelerate the energy transition by slowing the movement of goods and people powered by fossil fuels. Nations will also close themselves off and seek to reduce energy trade and generate more power locally. The growth of wind and solar is erecting a renewable energy duality in the 2020s that can help place Global North-South relations on a more equal footing.
Northern winds
Low prices and policy have helped wind eclipse hydropower as the dominant renewable energy source in Europe and the United States. This has been long in coming, but was unforeseen ten years ago. The North prioritized hydropower as a clean energy source in the 1950s and 1960s, ensconcing it over other renewables for decades. Hydro still dominates in China, Russia, Canada, and North-South-straddling Brazil.
The surge in wind this decade in Europe and now the United States thus bodes well for the future. New wind plants are coming online quickly. The United States could pursue more offshore wind. Building new hydro plants remains expensive, time-consuming, and environmentally challenging. They are no longer attractive investments. Others in the North will prioritize wind over hydro going forward.
Europe, of course, deserves credit for leading this revolution through policy. Anu Bradford argues in her excellent new book, The Brussels Effect: How the European Union Rules the World, that Europe forces the world to meet its high standards in all sorts of fields, including energy. Europe’s embrace of wind—Germany most notably—should also push the rest of the North along.
The United States, moreover, brings considerable resources to bear in investing in and further building out wind. Individual states, meanwhile, have taken the initiative, partly as a backlash to Trump’s antagonism towards wind. Even U.S. gas deserves credit for lowering prices across-the-board for power generation and electricity. This forced all renewables to compete aggressively for market share.
Southern rays
Low prices are also driving the South’s solar story. Auctions have also been vital to the industry’s growth. Seemingly every month, a new solar facility breaks the global record for pricing of solar-generated electricity. The South is naturally more endowed with solar power resources, too.
But capital is key. Whereas the North has the financial resources to invest in clean energy, the South generally lacks it. And policy can only go so far without it. The IEA’s forecasts for the growth in solar are based, after all, on investment assumptions.
Renewable capacity growth by technology, 2019-2024
Source: IEA.
A range of entities are financing large-scale solar in the Global South. Italian Enel brought online the 220-MW Magdalena II park in Mexico. It aims to open the 754-MW Villanueva park in 2024. A Thai-Vietnamese consortium is working on 667-MW facility in Vietnam. The European Bank for Reconstruction and Development is backing a 1.8-GW park in Egypt. There are countless other examples.
Large-scale solar power is coming to the South late, but maybe just in time. After all, developing countries are experiencing the climate crisis the most acutely. Domestically produced clean energy will slow environmental degradation and reduce demand for fossil fuel imports. In the process, it will bring some degree of energy justice to the South.
Corona’s consequences?
The IEA’s forecasts, of course, take past trends and project them forward. It did not foresee COVID-19, which could rewire the global energy system and arrest the growth of both wind and solar. China dwarfs the world in exports of renewable technologies, after all. The closure of its factories is likely to prompt price increases and stall the global uptake of them.
Renewable capacity growth by country/region, 2018-2024
Source: IEA.
China has, by far, the world’s largest production capacity for wind at 210 GW. It is also the world’s largest producer (130 GW) and exporter (58 GW) of solar. The United States trails China in both wind and solar production.
On a broader level, COVID-19 will prompt economic slowdown and even retrenchment in China and slow the country’s rise as a leader in green energy. The West and its Asian allies—the Global North—embraced hydrogen in 2019 to fill this vacuum amidst the U.S.-China trade war. They called a truce in trade in January just before COVID-19 went global. The clean energy terrain is now more up-for-grabs than before.
How the pandemic affects global energy remains to be seen. But policymakers should not let this volatility distract from continuing to invest and build in the windy North and sunny South. The emerging renewable energy duality makes use of natural, sustainable resources and will reduce the volume of fossil fuel-powered trade of fossil fuels in an uncertain global economy.
Photo credit: pxhere.com.
