Powering up the global south

The report examines how countries across Africa, Latin America, South Asia and Southeast Asia are using cleantech as a primary pathway to economic growth. It argues that energy system transformation in the Global South is occurring faster than widely assumed and is structurally different from historical fossil-fuel-led development models.

The global south needs energy – lots of it, and fast

Energy demand per person in the Global South averages around 32 GJ per year, roughly one-fifth of Global North levels. Around 685 million people still lack electricity access. Electricity demand per capita remains below the minimum energy threshold of 1 MWh per year in 41% of countries, creating strong pressure for rapid supply expansion to support growth, industrialisation and improved living standards.

However, the global south lacks fossil fuels

Despite representing around 60% of the global population, the Global South holds only about 20% of global fossil fuel production and reserves. Oil and gas production is declining, and the region is already a net fossil fuel importer. Import dependence creates fiscal stress, with large economies such as India spending around 5% of GDP on fossil fuel imports, increasing exposure to price volatility.

But the global south can be a renewable superpower

The Global South controls approximately 70% of global solar and wind potential and around 50% of critical cleantech minerals. Renewable energy potential is nearly 400 times larger than current fossil fuel production, providing a structural advantage for clean energy-led expansion relative to fossil pathways.

Three quarters of global south countries are in the sweet spot of change

Around 73% of Global South energy demand comes from countries that meet four conditions supportive of cleantech adoption: middle-income or higher status, low energy demand per capita, fossil fuel importer or self-sufficient status, and abundant renewable resources. These countries account for most current and future energy demand growth, while petrostates represent only about 5% of total demand.

Renewables, electrification, and efficiency are rapidly transforming the energy system

Solar and wind deployment is accelerating along an S-curve similar to earlier transitions in the Global North and China. In 2024, around 87% of electricity generation capital expenditure in the Global South is directed to clean energy. Solar and wind capacity is expected to grow by around 60% in 2024, reaching roughly 77 GW of new capacity.

The global south is catching up to global north electrification

Electricity already accounts for around three-quarters of Global North electrification levels, with growth occurring faster in the Global South. About 21% of Global South energy demand now comes from countries that have overtaken Global North electrification thresholds, supported by rapid uptake of electric vehicles in markets such as India, Thailand and Vietnam.

Why the global south will continue to adopt cleantech

Falling costs are central. Solar, wind and batteries reached capital cost parity with fossil generation in 2023, despite higher costs of capital. Electric vehicle purchase prices are also falling below those of internal combustion vehicles. Plentiful Chinese manufacturing capacity, with over US$100 billion invested globally since 2023, is easing supply constraints and accelerating deployment.

Renewables allow for faster energy growth than fossil fuels

Renewables are modular, faster to deploy and require lower upfront investment than fossil infrastructure. Solar and battery systems can be installed in under six months, compared with five to ten years for gas infrastructure, while reducing long-term dependency on fuel imports.

Change is not happening everywhere yet

Low-income countries, accounting for about 6% of Global South energy demand, and fossil fuel exporters, representing around 21%, are adopting cleantech more slowly. These groups face structural barriers including limited access to capital, weaker institutions and reliance on fossil export revenues, although early signs of transition are emerging in countries such as Ethiopia and Colombia.

The cleantech revolution will continue

By 2030, solar and wind generation in the Global South is expected to increase more than fourfold to over 2,000 TWh annually. Fossil fuel demand for electricity is projected to peak by 2030, and the region is unlikely to offset declining fossil demand in the Global North and China. By 2040, electricity supply could be up to 40% higher than business-as-usual projections, reinforcing electricity as a core driver of long-term economic growth.