Analysis shows annual investment in renewable energy sources needs to double from about $330bn to close to $750bn
The share of renewables should be more than doubled by 2030 to achieve the world’s clean energy transition objectives, according to a report.
The International Renewable Energy Agency (IRENA) believes renewable electricity should supply 57% of global power by the end of the decade, up from 26% today, to hit climate targets.
The Abu-Dhabi based intergovernmental organisation’s new report, titled 10 Years: Progress to Action, notes recent advancements in the industry and outlines the measures still needed to scale up on clean energy technology.
IRENA’s director-general Francesco La Camera said the world has entered “the decade of renewable energy action”, where the energy system will “transform at unparalleled speed”.
“To ensure this happens, we must urgently address the need for stronger enabling policies and a significant increase in investment over the next 10 years,” he added.
“Renewables hold the key to sustainable development and should be central to energy and economic planning all over the world.”
Countries’ targets for the renewable energy transition
With the world moving towards a greener economy, renewables look set to provide the majority of the planet’s future electricity as countries aim to reduce their reliance on high-polluting fossil fuels.
The EU has a gross final energy consumption target of 20% renewables by the end of 2020, with a more ambitious target of 32% in place for 2030.
As part of the North American Free Trade Agreement (NAFTA), the US, Canada and Mexico have a 50% target for renewable energy sources by 2025, while Latin America has pledged 70% by 2030.
The Economic Community of West African States (ECOWAS) is aiming for 38% clean energy by 2030, which it hopes to be achieved through the creation of 20 gigawatts (GW) of solar power, with the African Union targeting a minimum of 10GW of renewable energy on the continent by 2030.
IRENA’s renewable energy transition targets for 2030
IRENA’s analysis shows that annual investment in clean energy sources needs to double from about $330bn today to near $750bn to be able to deploy renewable energy at the speed required.
It says those requirements can be met by redirecting planned fossil fuel investments, with close to $10tn of non-renewable related energy projects planned before 2030.
The agency believes this puts at risk the possibility of assets becoming stranded and increases the likelihood of exceeding the world’s 1.5C carbon budget for this decade.
The report says additional investments in renewable sources bring significant external cost savings that include minimising key losses caused by climate change as a result of inaction.
It claims the savings could amount to between $1.6tn and $3.7tn annually by 2030, which is three to seven-times higher than investment costs for the energy transformation.
IRENA highlights how the falling technology costs continue to strengthen the case for renewable energy, with solar PV prices dropping by almost 90% over the past 10 years and onshore wind turbines almost halving in that period.
The agency says solar PV and wind costs may consistently sit below traditional throughout this decade, with the two technologies potentially covering over a third of global power needs.
It believes renewables can become a “vital tool” in closing the energy access gap, which is a key sustainable development goal.
Off-grid renewables have emerged as a key solution to expand energy access and now deliver access to about 150 million people, according to the report.
Data recorded by IRENA shows that 60% of new electricity access can be met by renewables in the next decade with standalone and mini-grid systems providing the means for almost half of new power.
La Camera said renewable energy systems are “affordable, readily available and deployable at scale” – but the world must move faster in scaling up their adoption.
He added that IRENA will continue to promote knowledge on the subject and strengthen its partnerships with stakeholders to enhance developments towards a low-carbon future and “catalyse action on the ground”.
IRENA’s agreement with EBRD to strengthen the renewable energy transition
IRENA and the European Bank for Reconstruction and Development (EBRD) have signed a memorandum of understanding to help minimise impacts on the climate and use electricity more sustainably.
EBRD finances projects that promote renewable energy and combat climate change, and has become the largest investor of the clean technology in central and eastern Europe, central Asia and the southern and eastern Mediterranean.
IRENA says the agreement will strengthen the organisations’ relationship and accelerate efforts to rapidly increase the share of renewable power in EBRD countries.
La Camera added: “Renewables are the only readily available solution that will enable sustainable economic growth, close the energy and infrastructure gap, and meet our climate and development ambitions at the same time.
“This strategic partnership unites IRENA’s knowledge excellence on renewables with EBRD’s global portfolio to promote renewable energy investment.
“By addressing the key risks and barriers that hinder the scale-up of renewable investment, we will accelerate the low-carbon energy transition and promote sustainable growth.”