THE United States and Israeli war against Iran has been the big energy story in 2026, but the quiet retooling of power grids from Lagos to Manila may prove to be of greater significance in the long run.
Emerging economies across Asia, Africa, Latin America and parts of the Middle East have outspent the rest of the world since 2024 on key clean energy components, setting themselves up for further rapid electrification.
And these investments extend beyond solar systems to the hardware needed to build power networks that can carry cheap electricity to homes, businesses and vehicles.
Since the beginning of 2024, the countries of the Global South have accounted for over half of the worldwide spending on three key sets of China-made technology: grid equipment, cooling systems, and solar arrays, data from think tank Ember shows.
This synchronised climb in investments in the components needed to electrify energy systems and scale up electricity distribution indicates broad system-building across emerging markets.
Network-wide grid upgrades in turn should make the next phase of electrification both faster and cheaper, as they will allow utilities to better incorporate even more renewable energy supplies, expand energy access to more customers, and allow for improved power flow management across national grids.
Solar arrays are cheap and easy to install, and have long been assumed to be the extent of most emerging market forays into the energy transition.
But data on import trends of China-made grid equipment reveal that a deeper and more widespread build-out of emerging market power systems is well underway.
Spending by economies including India, Pakistan, the Philippines, Brazil, South Africa and Vietnam on imported transformers, switch gear and transmission cables has topped US$25.3bil since the start of 2024, Ember data showed.
That compares to US$23.8bil spent on the same components by the rest of the world over that same period, and means that emerging economies have accounted for the lion’s share of spending on grid upgrades for most of the past three years.
Power networks and growth
Such heavy spending on grid components means that utilities are signalling serious system-level ambition when it comes to strengthening and extending their power networks, and are readying them for additional growth.
A lack of grid infrastructure has historically acted as a bottleneck for renewable energy supplies, so networks with upgraded grids can more easily dial up their renewable energy output levels while keeping electricity supplies flowing.
Global South economies have also outspent the rest of the world on heating and cooling equipment, with emerging economies spending close to US$26bil since January 2024 compared to US$21bil by the rest of the world.
In hot and fast-growing cities, demand for air conditioners is a major and rising source of electricity demand.
While the use of this equipment adds to overall power demand from both clean and fossil fuel sources, the simultaneous build-out of the underlying grid allows utilities to get ahead of that load growth and position the broader system to accommodate greater renewable energy generation.
The Global South has spent nearly US$47bil on photovoltaic solar systems since 2024, compared to US$37bil by the rest of the world.
That 55.4% share of global spending on Chinese solar systems since the start of 2024 has resulted in a dramatic surge in the deployment of solar power within emerging market electricity systems.
Each panel also represents a quantity of fuel that never needs to be imported for power production, and helps boost local support for additional renewable energy deployment going forward.
The EV push
Global South economies have also rapidly increased their imports of Chinese electric vehicles (EVs), which shows that their transportation systems are also being electrified at a record pace.
Wealthier economies continue to account for a majority of Chinese EV imports, and over the first eight months of 2026 spent US$116.5bil on them, according to Ember.
But emerging markets are catching up on that spending, and coughed up US$73.2bil so far this year on imported Chinese EVs.
That emerging market spend compares to only US$6bil on Chinese EVs during the same months of 2023, and so highlights how rapidly declining EV costs alongside more accessible charging infrastructure is driving EV uptake in all markets.
The Global South lags the rest of the world in terms of spending on Chinese battery energy storage systems.
Developed economies have accounted for 71% of the total spend on Chinese batteries since 2024, with emerging economies accounting for only 29%.
And without batteries, solar-heavy power grids run the risk of widespread curtailment and nightly power price spikes as solar production stops.
However, even here the Global South’s investments are rising quickly, from around US$9bil during January to August of 2024 to US$21bil during those months this year.
Another important aspect of the import data is that it is measured in US dollars, and China’s clean tech prices have fallen sharply in recent years.
This means that each dollar spent buys more capacity than it did before, and indicates that the physical build-out is likely even larger than the spending figures alone suggest.
All told, the economies of the Global South have spent roughly US$235bil on imported Chinese clean energy technology since the start of 2024.
Those expenditures have been largely overlooked amid the fallout from the war with Iran, which continues to roil global oil and fuel markets.
But throughout the entire conflict - and indeed during the years before it - emerging markets have been laying the foundations for more modern power systems that are less and less reliant on imported fuels for daily use.
And if storage capacity, access to finance and local energy policies can keep pace with the hardware already arriving, the Global South has the chance to electrify faster than any region before it.
The Hormuz may or may not open fully again. The transformers aren’t going anywhere. — Reuters
Gavin Maguire is a columnist for Reuters. The views expressed here are the writer’s own.
