The International Renewable Energy Agency (IRENA) believes the world needs to install an average of 1 TW new renewable energy capacity annually and across the globe to be able to grow deployment levels to over 10 TW in 2030, up from 3 TW now to keep the target of 1.5°C 'alive'.
Moreover, existing renewable energy targets will increase total renewables capacity to 5.4 TW by 2030, while the world needs 11.2 TW for the 1.5°C pathway, according to IRENA's World Energy Transitions Outlook 2023 Preview. The final report will be launched later this year.
Annual renewable energy additions need to grow to 975 GW/year in 2030 to 1.066 TW/year in 2050, to which solar PV should add 551 GW/year and 615 GW/year, respectively. Annual wind energy additions should grow to 329 GW/year in 2030 to 335 GW/year in 2050 to achieve the 1.5°C scenario.
Currently, deployment is concentrated in certain parts of the world including China, the European Union (EU) and the US, leaving out developing nations far behind.
Similarly, the report points out that renewable energy investment too largely remains concentrated in a limited number of countries and focused on a few technologies as solar PV and wind. IRENA recommends greater volume to flow towards other energy transition technologies as biofuels, hydropower and geothermal energy.
Global investment in energy transition technologies went up to $1.3 trillion in 2022, but this must grow to over $5.0 trillion annually so that by 2030 cumulative investments amount to $44.0 trillion, with transition technologies representing 80% or $35 trillion of the total. Priority should be accorded to efficiency, electrification, grid expansion and flexibility.
While stressing that any new investment decision is carefully assessed to simultaneously drive the transition and reduce the risk of stranded assets, IRENA also bats for public sector intervention to ensure investments are channeled towards countries in a more equitable way.
"We must rewrite the way international cooperation works. Achieving the energy transition requires stronger international collaboration, including collective efforts to channel more funds to developing countries," said IRENA Director-General Francesco La Camera. "A fundamental shift in the support to developing nations must put more focus on energy access and climate adaptation. Moving forward, multilateral financial institutions need to direct more funds, at better terms, towards energy transition projects and build the physical infrastructure that is needed to sustain the development of a new energy system."
IRENA's preview outlines three priority pillars of the energy transition, namely the physical infrastructure, policy and regulatory enablers, and well-skilled workforce.
The report preview from IRENA follows the Intergovernmental Panel on Climate Change's (IPCC) Synthesis Report of its 6th Assessment said pace and scale of what has been done so far to limit GHG emissions and even current plans are insufficient to tackle climate change. Calling for urgent climate action, it strongly recommends increasing finance for climate investments for climate resilient development.