PHILLIP ISAKPA

A global consensus on energy goals reached at the Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) in the United Arab Emirates in 2023, is suffering from significant policy and investment gaps in the efforts towards tripling renewables and doubling energy efficiency by 2030, the agency charged with the responsibility of tracking its progress has revealed in its first official report published over the weekend.

The report, “Delivering on the UAE Consensus: Tracking progress toward tripling renewable energy capacity and doubling energy efficiency by 2030”, by the International Renewable Energy Agency (IRENA), an intergovernmental organisation that supports countries in their transition to a sustainable energy future, found gaps across different areas in the renewable energy chain that form hindrances to achieving the two goals.

In a statement made available to Business a.m., IRENA stated that despite an unprecedented acceleration in renewable energy deployment in 2023, progress towards tripling renewables by 2030 has fallen short, noting that “current national plans and targets are set to deliver only half of the required growth in renewable power by 2030.”

As a result, the progress report determined that annual investment in renewable capacity would have to triple, from the new record high of $570 billion achieved in 2023 to $1.5 trillion every year between 2024 and 2030.

Accordingly, it disclosed that $31.5 trillion in cumulative investment in renewables, grids, flexibility, efficiency and conservation is needed to meet the UAE Consensus renewable energy and energy efficiency goals for 2030.

But cumulatively, it also disclosed that $31.5 trillion of investment in renewables, grids, flexibility, efficiency and conservation is needed to meet the UAE Consensus renewable energy and energy efficiency goals for 2030.

The landmark energy goals were established by the UAE Consensus at COP28 in Dubai with an understanding that tripling renewable power capacity and doubling energy efficiency by 2030 are critical enablers for reductions in greenhouse gas emissions in line with the 1.5 °C pathways. 

But the report found that massive gaps remain and in one instance established that tripling renewable power capacity to 11.2 terawatts (TW) would require average annual additions of  1 044 gigawatts (GW) in 2024–2030, a 16.4 percent compound annual growth,  up from 16.1 percent in 2023–2030.

According to the report, except for solar PV, capacity additions for all renewable energy technologies are below the level required to meet the tripling target, noting that compared to 2023 capacity, the world needs three times of current onshore wind, six times of current offshore wind and bioenergy; and 35 times of geothermal.

“The geographic deployment of renewable power remains  highly uneven,” the report found, and states that Asia, Europe and North America accounted for almost 85 percent of global end 2023 installed capacity; but Africa accounted for just 1.6 percent.

The progress report also found that at 7.4 TW, current national plans and targets will deliver only half of the required growth in renewable power by 2030, which will result in a shortfall of 34 percent or 3.8 TW in 2030.

“Renewable power targets in NDCs [Nationally Determined Contributions] do not align with national plans, and will only increase total renewable power capacity to  5.4 TW by 2030,” the report stated.

According to the report, only three parties submitted revised NDCs since COP28 with only one having enhanced ambitions for renewable energy targets.

Little meaningful progress has been made on energy intensity improvement, which remains around the two percent level of 2022, and against an annual improvement rate of  at least four percent required through 2030 to meet the goal.

According to the report, achieving a four percent energy intensity improvement rate will require urgent actions and increasing electrification across multiple sectors, including personal and freight transport, buildings and industry.

It observed that while electric cars accounted for a record 18 percent of total car sales in 2023, sales of heat pumps, which are vital to the energy-efficient decarbonisation of the heating sector, fell by three percent.

It acknowledged the high investments in renewable capacity in 2023, but that these investments would need to rise even more.

“Investments in energy efficiency must increase almost seven-fold. In 2023 around USD 323 billion was  invested to improve energy efficiency in end-use sectors, but USD 2.2 trillion is needed each year,” the report found.

Accordingly, it disclosed that $31.5 trillion in cumulative investment in renewables, grids, flexibility, efficiency and conservation is needed to meet the UAE Consensus renewable energy and energy efficiency goals for 2030.

The report also found that annual investments in solar PV are on track to meet the $397 billion required each year until 2030 to achieve the tripling goal, but that other technologies however remain under-funded.

According to the IRENA progress report, in 2023, 84 percent of renewable capacity investments were in China, the European Union and the United States; with Brazil and India accounting for just over six percent; while investments in Africa fell by 47 percent in 2022–2023.

According to the report, renewable power is the cheapest option for new electricity in almost every country in the world with 81 percent (or 382 GW) of new renewable power generation capacity in 2023 producing cheaper electricity than new fossil fuel-based capacity. It also noted that costs for stationary battery storage have fallen by 89 percent since 2010.

In its recommendations of what should be done under these circumstances, the progress stated that to deliver the UAE Consensus goals on the ground, significant advances will be required across the key enablers of the energy transition, including infrastructure and system operation, policy and regulation, supply chains, skills and capacities, finance, and international collaboration.

“Emerging and developing economies continue to face financing gaps that undermine access to capital-intensive energy transition technologies. Renewable power investments in Africa declined by 47% between 2022 and 2023. Sub-Saharan Africa received 40 times less than the world average per capita transition-related investment,” it observed

According to the report, reducing this gap involves securing financing at better terms by mitigating country risks and increasing the availability of concessional finance, mostly from multilateral and bilateral development funds and financing institutions and philanthropies.

It also recommended international collaboration, which it stated would be crucial to better channel funds to achieve climate, development and industrialisation goals for a more equitable world.

“Today, we’re raising the alarm. As the custodian for tracking progress of the UAE Consensus energy goals, we must flag significant gaps. The COP28 goals of tripling renewables and doubling energy efficiency are key enablers for our global efforts to keep 1.5°C within reach but we risk missing them. The next NDCs must mark a turning point and bring the world back on track,” said Francesco La Camera, IRENA’s director-general.

Sultan Al Jaber, COP28 president added: “The global goals of tripling renewable energy capacity and doubling annual energy efficiency improvement by 2030 set out in the UAE Consensus are not just benchmarks ─ they are essential enablers of all global efforts to achieving 1.5 °C and advancing sustainable prosperity for all. The opportunity is there but we need more nations to step up to the plate by including specific renewable energy and infrastructure targets in their upcoming NDCs, incentivizing private investment, and making it easier to develop and deploy projects. We need to think bigger, act bolder ─ and collectively move faster on our energy transition journey.”

Mukhtar Babayev, COP29 president-designate said: “This important set of findings by IRENA and GRA includes vital insights on accelerating the global energy transition. Central to our plan to enhance ambition and enable action are a number of Presidency-led initiatives that contribute to global climate action at COP29, and which reflect the outlook and opportunities captured in this report. These include driving the agenda forward through the creation of green energy zones and green energy corridors, strengthening electric grids, increasing energy storage capacity, and development of clean hydrogen. To take tangible steps and turn these recommendations into reality, we are working closely with international partners to ensure that commitments translate into tangible outcomes that benefit all nations, including those most vulnerable to the impacts of climate change. The time for action is now. We call on all stakeholders — governments, businesses and civil society — to intensify their efforts and deliver progress in support of these critical goals.”

Parviz Shahbazov Ogtay, energy minister of Azerbaijan added: “The report of the International Renewable Energy Agency on the Global Renewables and Energy Efficiency Pledge provides critical signals that we need to increase our ambitions and actions in the fight against climate change and the energy transition. To achieve [the] tripling target requires countries to enhance their renewable energy ambitions, update their Nationally Determined Contributions, and increase investments. In this regard, COP29 will build on the COP28 agreement by advancing initiatives and priorities that accelerate the development of renewable energy potential and remove barriers to its expansion.”

Bruce Douglas, chief executive officer, Global Renewables Alliance, who also spoke, said: “While the momentum behind renewable energy is unprecedented, it’s clear that we are still falling short of where we need to be by 2030. Industry has proven time and again that we can deliver – and even surpass – expectations when the right frameworks and policies are in place. Now is the time for governments to seize the opportunity of the NDC review, to set ambitious, specific and actionable plans that bridge the current gap and achieve the global 3xRenewables target by 2030. Our message is clear: Now Deliver Change.”