In a groundbreaking development set to reshape global energy dynamics, the expansion of the BRICS (Brazil, Russia, India, China, and South Africa) bloc with the inclusion of new members, namely Saudi Arabia, Iran, United Arab Emirates (UAE), Egypt, Ethiopia, and Argentina, is poised to propel the alliance into a leadership position in the renewable energy sector over the coming decades, according to a comprehensive study by Rystad Energy.
Scheduled for January 2024, the entry of these six new nations into the BRICS fold marks a significant turning point for the grouping. The research conducted by Rystad Energy indicates that by 2050, the BRICS+ alliance is projected to generate more than 80% of its power from renewable sources, boasting a total capacity of 11 terawatts (TW). This capacity is more than double the combined 4.5 TW expected in the Group of Seven (G7) nations, consisting of Canada, France, Germany, Italy, Japan, the UK, and the US.
Renewable energy has been steadily gaining prominence as costs decline, making it an increasingly attractive prospect for investors in the BRICS+ nations. This appeal is further bolstered by the abundant natural resources and affordable labor available in most of these member countries. Such conditions provide a fertile ground for substantial growth in gross domestic product (GDP) per capita, all while population growth remains relatively modest in comparison, emphasizing the economic prowess of the incoming members.
However, despite rapid economic growth, the BRICS+ nations are confronted with the challenge of reducing emissions due to their continued dependence on fossil fuels. In contrast, the G7 nations have witnessed a decline in emissions thanks to their early adoption of green technologies and policies. Both groups are now setting ambitious climate targets, underlining the pivotal role sustainable energy will play in the ongoing global energy transition.
Lars Nitter Havro, Senior Analyst at Rystad Energy, commented on this transformative shift, saying, “The BRICS+ alliance is fundamentally reshaping the global energy landscape, challenging established paradigms and committing to ambitious sustainability targets. As this emerging superpower’s economies expand and energy demands continue to evolve, ensuring a stable and secure energy supply will become paramount. This provides an opportunity to directly shift towards advanced sustainable energy infrastructure rather than relying on outdated frameworks.”
Furthermore, the BRICS+ nations, led by China, play a crucial role in the clean tech supply chain, particularly in the production of batteries and solar panels, essential components for the transition to cleaner energy sources. A notable example of this trend is witnessed in the UAE, where Masdar, a subsidiary of the state-owned Mubadala Investment Company, recently secured a groundbreaking contract to expand the Mohammed bin Rashid Al Maktoum solar park by adding 1.8 gigawatts (GW) of solar energy at an incredibly competitive rate of 1.6215 US cents per kilowatt-hour (kWh), marking the lowest traded price for energy in the UAE.
Electric Vehicle Adoption Set to Skyrocket within BRICS+ Bloc
The rapid adoption of electric vehicles (EVs) serves as a crucial indicator of the pace of the energy transition. China, a member of the BRICS+ alliance, currently leads the world in pure battery EV (BEV) sales, surpassing the G7 countries. This impressive growth in EV adoption can be attributed to advancements in battery technology, infrastructure development, and supportive government policies.
China’s ambitious expansion in solar capacity, with a target of reaching 1 terawatt (TW) by 2026, significantly contributes to the shift towards cleaner energy sources, thereby reducing the carbon footprint of its transportation sector. This holistic approach aligns with China’s commitment to transform its energy landscape and reduce its reliance on fossil fuels, mirroring the strategies adopted by fellow BRICS+ nations. Estimates suggest that EVs will constitute over 60% of all new car sales within the expanded BRICS+ bloc by 2035.
Moreover, as the alliance continues to invest in EV charging infrastructure and maintains its leadership in battery technologies and raw materials processing, the share of EVs in total vehicle sales across BRICS+ nations is projected to reach a staggering 86% by 2040, assuming a 1.6-degree global warming scenario. This scenario appears increasingly likely based on recent growth rates in EV sales, supportive policies, technological advancements, and evolving demand patterns.
BRICS+ Alliance Expands Energy Production Capacities with New Members
In a shift of global energy dynamics, the BRICS+ bloc is poised to play a pivotal role in global oil production, with its members collectively meeting two-thirds of the world’s crude oil demand. These nations have a proven track record of contributing to a balance in global oil supply and demand, thus helping stabilize crude oil prices. This commitment is reinforced by Saudi Arabia, a planned new member of BRICS, which recently extended its voluntary production cut of 1 million barrels per day through to the end of 2023.
Within this evolving landscape, BRICS members like Russia and the newcomer Saudi Arabia are positioned to play vital roles. Western sanctions imposed on Russia following its invasion of Ukraine have prompted Russia to offer discounted oil to buyers. This development has proven advantageous for India, the world’s third-largest oil importer, as it actively diversifies its sources of crude oil supply to meet its growing demand. Consequently, India has substantially increased its oil imports from Russia, surging from 1% before the conflict to 34%, totaling 1.64 million barrels per day as of March this year.
In terms of natural gas production, the BRICS+ grouping is expected to account for 37% of liquids and 33% of gas production globally. This underscores the emphasis placed by new members on energy production, positioning BRICS+ as a global leader, even surpassing the G7’s liquids production, which stands at 27% of the global total amid the rise in US production.
BRICS+ Nations Shift Focus Towards Energy Exports
In a remarkable transformation, the BRICS+ bloc is shifting from being recognized primarily as a major energy consumer to becoming a net exporter of primary energy. This transition is particularly noteworthy due to the economic prominence of China, which has been driving increased energy demand within the alliance. As BRICS+ matures further, it is expected to produce an energy surplus, surpassing the consumption levels of its largest members, largely thanks to the energy exporter status of several newly added members, most notably Saudi Arabia.
In stark contrast, the energy dynamics of the G7 nations tell a different story. Despite commendable strides in energy efficiency and production, the G7 remains a net importer of primary energy. Historically, the group’s reliance on energy imports, often from the Middle East and Russia, has led to geopolitical tensions and economic vulnerabilities.
The United States, transitioning into a net exporter of primary energy, has grappled with energy security concerns, resulting in strategic measures such as the establishment of the Strategic Petroleum Reserve in response to events like the 1973 oil embargo led by Saudi Arabia. Meanwhile, European G7 members continue to be heavily dependent on Russian gas, making their energy policies and expenditures more vulnerable to geopolitical leverage, as witnessed during recent energy crises.
For the G7, achieving energy self-sufficiency extends beyond economic considerations; it is also a matter of safeguarding sovereignty. The G7 faces multifaceted challenges related to energy sovereignty, including control over clean tech supply chains, technological leadership, job creation, reducing dependence on volatile regions, and maintaining economic competitiveness.
