Unlocking Clean Power for All
How tipping points theory can guide effective use of public funds
Solar photovoltaic (PV) and onshore wind are now the cheapest options for new power generation, but enabling policies are still needed to speed up deployment, particularly in lower income countries. Public financial support measures most likely to facilitate tipping in lower income countries are concessional finance, grants, and loan guarantees; grid investments; and fossil fuel subsidy reform. Increased transfers are needed from the international donor and finance community.
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Solar photovoltaic and onshore wind are now the cheapest types of new power generation in many countries, but government support is still needed to accelerate the energy transition, particularly in lower income countries.
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Renewable energy still faces substantial barriers in most emerging and developing economies. Government action is needed to reduce the cost of capital, modernize grids, and increase the financial viability of utilities.
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Achieving the COP 28 pledge to triple renewable capacity by 2030 requires urgent government action to accelerate the pace of deployment, remove barriers, and ensure the energy transition includes all countries, not just advanced or large economies.
Supportive government policies have been instrumental in grid-scale solar photovoltaic (PV) and onshore wind passing a tipping point to become the cheapest options for new electricity generation in many countries. Yet, enabling policies continue to be needed to accelerate deployment to achieve global climate goals and to ensure lower income countries are not left behind in the energy transition.
While each country’s pathway will be unique, tipping point theory and experience with successful deployment of renewables suggests that public financial support measures most likely to facilitate tipping in emerging market and developing economies (EMDEs) are
- international concessional finance, grants, and risk mitigation instruments to compensate for high upfront investment needs and cost of capital in EMDEs;
- investments in grids to facilitate integration of variable renewable energy; and
- fossil fuel subsidy reform to level the playing field and generate revenue to fund a just energy transition.
The international donor and finance community can assist by increasing transfers to lower income countries, including by reallocating international finance from fossil to renewable energy and by committing to an ambitious new climate finance goal.
Participating experts
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