It's amazing how quickly the falling price of solar and wind power has shifted the global energy consensus. Coming into the Paris climate talks on Monday, 177 countries had already pledged to reduce their CO2 emissions, signaling much more support for a deal than in Copenhagen just six years ago.
So it wasn't surprising when Indian prime minister Narendra Modi and French president François Hollande launched a 120-nation ‘Global Solar Alliance’ on the first day. Most members are developing countries who get intense sun about 300 days a year, hence the name, and they will join deep-pocketed European countries, the US, and China in a powerful global synergy.
Modi pledged $30 million to set up headquarters for the alliance in New Delhi and hopes to raise $400 million through participating nations.
President Hollande summed up the goal of the alliance by saying, “Seizing the abundant resource of the sun, it is a partnership of states with private stakeholders from around the world."
Ending energy poverty
Clearly this carefully orchestrated announcement, coming so soon after Bill Gates' group of investors pledged billions to nurture early-stage green technology, makes it clear that renewable energy has mainstreamed. It gives the world the tools to boost economic development, bring the poor out of energy poverty, and still rein in CO2 emissions.
It's no coincidence that lower cost solar has already opened the door for a clean-energy transition in India. The difference between India's current position in Paris and previous climate talks is stark. Pre-solar and pre-Modi, Indian negotiators staunchly argued that coal was the only way to lift the country's poor out of poverty.
Modi's new message is different and more optimistic. "Solar technology is evolving, costs are coming down, and grid connectivity is improving," he said. "The dream of universal access to clean energy is becoming more real. This will be the foundation of the new economy of the new century."
It seems like Modi was destined for a role in Paris. He was originally elected prime minister after his success as a booster for solar energy in his home state of Gujarat. Now he's set an investment target of $100 billion for India’s solar sector and at least 175 gigawatts of renewable energy by 2022.
India has already taken several steps toward reaching its investment goal, according to Greentech. The government has been in talks to secure $2 billion from the World Bank and the Asian Development Bank. Last week, the Indian government-owned IDBI Bank issued $350 million in green bonds to help fund low-carbon energy projects. The program ultimately attracted orders totaling more than $1 billion.
More bang for the buck
Since the basic idea for the Alliance is to aggregate developing nations to lobby the world’s richest countries, Modi explained, "We'll attract investments in the solar sector, encourage joint ventures, and develop innovative financing mechanisms."
The alliance also hopes to inspire companies to develop low-cost solutions.
“A big piece of it will be to work with the World Bank and certain other large lenders to create loans for large solar developers, so that they can set up plants,” Namit Arora, who recently led the drafting of a solar energy policy for the New Delhi government, told The National.
Mr Arora also said that the new alliance would benefit India. “One problem is that there is very little solar panel manufacturing in India. Most comes from China,” he said.
This will create incentives for companies in India to create solar panel manufacturing businesses and flood rural parts of the world with solar energy.
Spreading momentum
Meanwhile, the African Union has launched the African Renewable Energy Initiative, pledging $20 billion towards developing 10 gigawatts of renewable energy over the next 10 years. Some of the funds will be drawn from institutions like the African Development Bank and the $100 billion previously pledged by the world’s developed countries during the G-7 conference in June.
The African Development Bank has turned its focus, aiming to bring electricity to 620 million people by the end of the decade. Although the bank will continue to fund conventional power plants, it intends to triple its renewable projects to $5 billion annually by 2020.
“We have enormous natural resources for clean energy in Africa,” Akinwumi Adesina, the bank's president, told Bloomberg. “We have the potential to deploy 11 terawatts of solar energy, 350 gigawatts of hydro, 110 gigawatts of wind and 15 gigawatts of geothermal.”
The initiative is likely to develop geothermal projects in East Africa’s Rift Valley, wind in North Africa such as in Egypt and hydropower across the continent, Rugamba said. At present, however, the initiative doesn’t have an established pipeline.