BloombergNEF believes the world is currently off track to meet the goal of tripling renewable energy capacity
It is still possible though to course-correct, but it will require the removal of investment barriers
Developing countries especially need this investment, and the world also needs to build power grids
The world is not on track to achieve the global target of tripling renewable energy capacity by 2030 to 11 TW, yet it is achievable, provided this market receives $1 trillion investment on an average between 2024 and 2030. An additional $193 billion/year in battery storage and another $607 billion in improving electricity grid infrastructure are also a must, and most of this investment should go to developing nations, says Bloomberg New Energy Finance (BloombergNEF) in a new report.
Comparatively, $623 billion was invested in renewables in 2023, and close to $313 billion during H1 2024. China alone took in $130 billion during the 1st half of this year.
The analysts believe both China and Brazil to be broadly on track to meet their contribution to the global tripling goal. It is Europe, the US and India that need to accelerate their efforts in this direction since their policy support is already strong.
In comparison, Japan, Indonesia, the Middle East, North Africa and Turkey region and Sub-Saharan Africa are ‘well behind’ the volumes required for investment as well as deployment.
Analysts in the BloombergNEF report titled Unlocking Investment to Triple Renewables argue that the high investment levels are feasible particularly since the cost of renewable energy has fallen over the past decade. Solar especially is growing rapidly without very little government support. This clean energy technology is forecast to account for 62% or 7.2 TW of the 11.6 TW installed renewable energy capacity that BloombergNEF forecasts the world to reach by 2030 under its Net Zero Scenario (NZS).
Wind will contribute 23% or 2.7 TW and the remaining 1.5 TW will come from other renewables including hydropower, geothermal and biomass.
“Solar has a lower capacity factor and in seasonal climates can leave a large deficit in power supply during the winter. For a smoother transition to net zero, policy should support sectors where investment is lagging, such as wind, storage and grids,” recommends the report.
In 2023, global renewable energy installations totaled 578 GW, driven by solar. At this continued pace, the analysts believe 8.2 TW capacity could be installed by the end of this decade, 29% below the net-zero pathway.
Nonetheless, BloombergNEF sees annual additions to increase further with current policies, announced project pipelines and economics. Based on these factors, the world will have around 10.3 TW of renewable energy capacity installed by 2030, up from 4.1 TW at the end of 2023, still 13% short of the net-zero pathway.
“Since COP28, we’ve seen real progress in renewable energy investment, but it’s not happening fast enough,” said UN Secretary-General’s Special Envoy on Climate Ambition and Solutions, Founder of Bloomberg L.P. and Bloomberg Philanthropies, Michael R. Bloomberg, “The more the public, private, civil society, and nonprofit sectors come together to develop and implement concrete plans for eliminating barriers to investment, the better chance we have of reaching our net-zero goals, growing the global economy, and saving more lives.”
The complete report, commissioned by Bloomberg Philanthropies, is available for free download on BloombergNEF’s website.