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Designing efficient mechanisms for allocating climate funds to the developing world will require country-specific assessments of the cost of scaling up renewable energy technologies, says climate researcher Michael Jakob.
Developing countries need financial support to help them adopt low-carbon technologies. Industrialised countries should cover the cost, according to the UN Framework Convention on Climate Change; the Green Climate Fund could help cover such mitigation efforts.
A novel method for estimating the funds needed to scale up renewables shows that costs vary depending on the country and the technology, says Jakob. Earlier efforts to estimate costs relied on simplified assumptions and did not take into account local circumstances. But the new, "bottom up assessment framework" uses country-specific data on their potential to generate energy from renewable sources, as well as of the costs involved, including investment, operation and system maintenance.
Based on data for solar photovoltaic and wind energy in Brazil, Egypt, India, Kenya, Nicaragua and Thailand, the study revealed variation among countries. The costs range "from 56 euros per megawatt hour in Kenya to more than 100 euros in Thailand, mainly owing to differences in ‘potentials’ — that is, the existence of good sites to produce wind power", writes Jakob.
For all countries, wind power appeared the most cost-efficient way of scaling renewables up to 10 per cent of all sources of power, regardless of any future reduction in the cost of solar photovoltaics.
These data contribute to discussions about how developing countries can be helped to make a transition to renewable sources of energy, says Jakob, but they leave some questions unanswered. For example, country-specific assessments would require vast amounts of data, and would involve complex negotiations to reach agreement over the methodology to be adopted.
But by showing that each country has specific financial needs that can be assessed based on the technologies considered, the new study points the way to designing cost-efficient mechanisms for allocating climate funds, Jakob concludes.