Countries need $2 trillion per year to triple global renewables by 2030

The total tab to achieve one of the cornerstone emission reduction goals laid out by the Intergovernmental Panel on Climate Change is about twice as much as countries invested in renewables in 2023.

A report by Berlin-based Climate Analytics says “Asia is the only region which is broadly on track to triple renewables in line with 1.5ºC by 2030. iStock photo.

This article was published by The Energy Mix on Feb. 12, 2024.

By Mitchell Beer

It will cost US$2 trillion per year to triple global renewable energy capacity by 2030, as countries pledged to do at last year’s United Nations climate summit in Dubai, the Berlin-based Climate Analytics think tank concludes in a report issued Tuesday morning.

The total tab to achieve one of the cornerstone emission reduction goals laid out by the Intergovernmental Panel on Climate Change is about twice as much as countries invested in renewables in 2023. But it’s also less than one-third of the $7 trillion governments shelled out in fossil fuel subsidies in 2022, according to the International Monetary Fund, and just under 2 per cent of that year’s global economic output, or GDP, of $101.3 trillion, as calculated by the World Bank.

The commitment to triple renewables capacity to 11.5 terawatts (TW, or trillion watts) by 2030, along with a doubling of annual energy efficiency improvements, “is possibly the most powerful action the world can take in the transition away from fossil fuels this critical decade,” Climate Analytics writes. But some countries are falling short of the targets, particularly in Sub-Saharan Africa, “due to a chronic lack of investment and international support,” the 33-page report warns.“Without an urgent and rapid increase in finance to support renewables deployment in Africa, millions will miss out on the benefits of the renewables revolution—cleaner air, cheaper power, and increased energy security.”

Of the $12 trillion required between 2024 and 2029, two-thirds would be earmarked for new renewable energy installations, the rest for grid and storage capacity to support them. The targets exceed countries’ current 2030 plans by a wide margin, while pushing past the capacity gains forecast by modelling bodies like the International Energy Agency.

“Investment in renewables and grid expansion needs to be massively upscaled to ensure a 1.5ºC aligned transition in the power sector,” the report states.

The analysis shows different regions of the world expanding renewables capacity between 2.3- and 11.8-fold over the balance of this decade, “driven by the pace of fossil phaseout needed and future electricity demand growth.” Asia adds 3,850 GW and OECD countries 2,910, with Sub-Saharan Africa and Eurasia accounting for another 680 GW between them. Asia contributes about half of the new capacity over the rest of this decade, just as China alone does today.

At the low end for proportional growth, Latin America increases installed renewables by 420 gigawatts (billion watts), to 730 GW. At the other extreme, the Middle East increases capacity from just 40 GW in 2022 to 500 in 2030.

So far, “Asia is the only region which is broadly on track to triple renewables in line with 1.5ºC by 2030. This is primarily driven by growth in China and India which compensates for laggards like South Korea, where renewable capacity is set to grow at half the rate of the region as a whole,” the report says.

“However, the spree of coal-fired power plant construction in China and India is a huge concern. If this continues, it will either jeopardize a 1.5ºC-aligned power sector transition, or create large-scale stranded assets.”

The OECD countries will need new policies avoid falling about one-third short of their 2030 target, Climate Analytics adds. “Addressing this shortfall would close around 60 per cent of the 2-TW global gap between forecast renewable growth and a 1.5°C-aligned tripling.”

 

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