The world would need to add another 8.1 TW between 2022 and 2030
Photo: iStock The world would likely need an average of $2 trillion per year from 2024 through 2030 to achieve a key pledge signed at the 28th meeting of the Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change, according to a new report.
At COP 28, 124 countries pledged to triple global renewable power capacity and double the annual rate of energy efficiency improvements by 2030. Further, this goal was also mentioned in the Global Stocktake (GST) — an assessment of global progress on climate action — released at COP28.
Tripling renewables to limit temperature rise to 1.5°C above preindustrial level would require $12 trillion of investment in the power system through 2030 ($2 trillion per year), a report from the Climate Analytics, a global climate science and policy institute, stated.
Of the 12 trillion, some 66 per cent ($8 trillion) should be channelled into the installation of renewables and the rest ($4 trillion) into the grid and storage infrastructure needed to support renewables.
Several global pathways, including the International Energy Agency’s net zero scenario, the International Renewable Energy Agency’s 1.5ºC compatible pathway, and analysis of the Intergovernmental Panel on Climate Change’s 1.5ºC compatible pathways, have shown that renewable capacity needs to reach at least 11 terawatts (TW) by 2030.
In 2022, the renewable energy capacity stood at 3.4-3.6 TW. This means the world would need to add another 8.1 TW between 2022 and 2030.
As for investments, in 2023, the report noted that the renewables and grid expansion sector attracted only roughly $1 trillion.
“We need governments to take urgent action to turbocharge an already buoyant renewables market. Public finance is key, especially international support to provide access to low-cost capital for emerging markets to join the renewables era, ensuring a clean, secure, and just transition for all,” Bruce Douglas, CEO of the Global Renewables Alliance, said in a press statement.
The report also called for redirecting fossil fuels financing to renewables. Over 2024-2030, the world is expected to invest over $6 trillion in fossil fuels under current policies while investments in renewables and grid could reach $6.6 trillion.
Shifting this money to renewables and grids, the report added, could cover the investment gap.
“$2 trillion a year sounds like a cost, but it’s really a choice. We’re set to invest over $6 trillion in fossil fuels over this decade – more than enough to close the tripling investment gap. Faced with this choice, I’d go with the safest, best value option — renewables,” Neil Grant, the report’s lead author and Climate Analytics, said in a statement.
The other concern is the lack of support in certain regions of the world. These places, particularly Sub-Saharan Africa, are at risk of falling behind in the effort to triple renewables due to a chronic lack of investment and international support.
In Sub-Saharan Africa as well as the Middle East and North Africa, the renewable energy capacity in 2030 relative to 2022 needs to grow 6.6 times and 11.8 times, according to the report.
Also, the annual investment in renewables and grid expansion in Sub-Saharan Africa was around $20 billion in 2023. This is about a fifth of the ~$100 billion needed each year between 2024-2030, the report highlighted.
Though the report expects to see a significant dent in emissions and fossil fuel use by 2030 by tripling renewable capacity and doubling energy efficiency, countries should continue to increase their renewable capacity to stay aligned with the 1.5C pathway, with capacity reaching around 17.5 TW by 2035 – up five-fold from 2022 levels. “Tripling is just the beginning,” the report noted.
The report comes as Parties discuss the New Collective Quantified Goal on Climate Finance (NCQG), a new global climate finance goal that is expected to be agreed upon by 2024.
The report stressed that much more needs to be done to mobilise investment in renewables and grid expansion in less wealthy countries as governments come together to negotiate a new climate finance goal. “Without this, the pledge to triple renewables made at COP28 will ring increasingly hollow,” the authors wrote. Discussions on NCQG at COP28 showed little progress.
Expanding renewable energy alone will not suffice. The report calls for a fossil phase-out. The assessed 1.5ºC compatible pathways would need fossil fuel production and use to fall by almost 40 per cent by 2030 relative to 2020.
The final GST draft called for transitioning away from fossil fuels in energy systems to achieve net zero by 2050.
At COP28, civil society groups demanded that GST text include reference to a phaseout of fossil fuels by 2030 and that rich countries transition first and fastest.
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