Etienne Gabel

Sharing insights elevates their impact

The ongoing energy crisis is challenging the design of many power markets globally. Underinvestment in conventional energy infrastructure, the post–COVID-19 economic rebound earlier this year, the war in Ukraine and Russia’s interruption of gas supplies to Europe, and important climatic events (such as droughts in Europe and mainland China) are creating urgent and interrelated crises for policymakers to confront.

The ongoing energy crisis is challenging the design of many power markets globally. Underinvestment in conventional energy infrastructure, the post–COVID-19 economic rebound earlier this year, the war in Ukraine and Russia’s interruption of gas supplies to Europe, and important climatic events (such as droughts in Europe and mainland China) are creating urgent and interrelated crises for policymakers to confront.

As 2023 began, the Global Power and Renewables team of S&P Global Commodity Insights examined five key trends that we believe will define power and renewables markets worldwide this year. In this blog post, we summarize three of them.

The “Global South”—a term often used for the developing countries of South Asia and Southeast Asia, Latin America, and Africa—houses 56% of the world’s population but holds only 18% of its power generation capacity (see figure below). Power demand per capita, at about 1000 kWh/year (about the same as a clothes dryer), is less than a third of the world average.

COP28 ended on December 13th with parties pledging to triple renewable energy capacity by 2030. How difficult is this goal for different governments? And which markets will likely find it easier or harder to achieve it than others? S&P Global Commodity Insights reviewed renewable project pipelines around the world, analyzed existing policies and market dynamics, and compared our latest 2030 outlooks by market. We conclude that although the tripling objective is not established by country—it is global, or “collective”—reaching it will require accelerating renewable deployment in markets that have substantially different advantages and challenges.

Emerging markets must navigate new challenges and opportunities to power their future while advancing their energy transition.