This article was published by The Energy Mix on Jan. 12, 2024.
By Mitchell Beer
The world is within reach of hitting the COP28 target of tripling global renewable energy capacity by 2030, but only if governments move swiftly to close the gap between their current good intentions and the policies and investments needed to get the job done, the International Energy Agency concludes in a new analysis this week.
Countries added 50 per cent more renewable energy capacity last year than they did in 2022, with solar photovoltaics (PV) accounting for three-quarters of the nearly 510 new gigawatts installed worldwide, the IEA reports. The surge was driven by record renewables installations in China, followed by Europe, the United States, and Brazil, with China increasing its new wind power additions by two-thirds and commissioning as much new solar in 2023 as the whole world did the previous year.
New renewables are set to hit a record 7,300 gigawatts over the next five years, 95 per cent of it from solar and wind, with China alone delivering about 60 per cent of the total. But the IEA says that flurry of activity will only be enough to deliver a 2.5-fold increase in global capacity, not the tripling countries agreed to during last month’s COP28 negotiations as a cornerstone of the effort to keep a 1.5°C average global warming limit alive. Insufficient financing for clean energy development in developing countries is still a huge obstacle.
“It’s not enough yet to reach the COP28 goal of tripling renewables, but we’re moving closer—and governments have the tools needed to close the gap,” IEA Executive Director Fatih Birol said in a release. “Onshore wind and solar PV are cheaper today than new fossil fuel plants almost everywhere and cheaper than existing fossil fuel plants in most countries.”
“The twin COP28 goals of a tripling of global renewables and a doubling of energy efficiency could help push energy CO2 emissions down by 35 per cent by 2030,” David Jones, program director at the Ember energy think tank, said in an email release. “This means we are increasingly on track not only for a peaking of fossil fuel use this decade, but for sizable falls in fossil fuel use.”
But that promise “is at odds with the huge investment planned by the oil and gas industry, fuelled by the super-profits of the energy crisis, which is creating a chasm between outlook for demand and the outlook for supply,” he added. That gap will make 2024 “the year that renewables changed from a nuisance for the fossil fuel industry, to an existential threat.”
The IEA report looks ahead to a series of milestones over the next five years: solar and wind generation will exceed hydropower this year, renewables will surpass coal in 2025 to become the world’s biggest source of power generation, wind and solar will surpass nuclear in 2025 and 2026, and renewables will account for 42 per cent of global electricity generation in 2028.
But none of that activity will be enough for renewables to hit the 11,000 gigawatts of installed capacity that would amount to a tripling since 2022. Like with most IEA analysis, the report presents a base case for renewable energy expansion and an “accelerated pace” that shows 21 per cent more capacity. But that’s only enough to increase the total from 7,300 to 8,833 GW, still well short of the COP28 target.
The report lists several main obstacles to hitting the target:
• Uncertainties over government policy support;
• Grid bottlenecks brought on by insufficient infrastructure investment;
• Administrative and permitting delays;
• “Social acceptance” of local projects;
• Insufficient financing in developing countries.
“The most important challenge for the international community is rapidly scaling up financing and deployment of renewables in most emerging and developing economies, many of which are being left behind in the new energy economy,” Birol said. “Success in meeting the tripling goal will hinge on this.”
The report also delivers what the IEA calls a “reality check” on heavily-hyped green hydrogen, noting that just 7 per cent of the production capacity that companies have announced is likely to be online by 2030, the deadline set by the Intergovernmental Panel on Climate Change to reduce global climate pollution by 45 per cent.
“The slow pace of projects reaching an investment decision combined with limited appetite from offtakers and higher production costs have led to slower progress on many projects,” the IEA writes. “To fully convince investors, ambitious project announcements will have to be followed by consistent policies supporting demand.”
The report sees electric vehicles and biofuels developing into a “powerful complementary combination for reducing oil demand,” with biofuel demand on track to grow 70 per cent over the next five years. Further growth is being hampered by supply chain problems and a lack of policy support, the IEA says.
Renewable heat grows 40 per cent, driven mainly by installation of electric heat pumps and boilers. The report lists financial incentives, renewable heat obligations, and fossil fuel bans in the buildings sector as policies that support that shift.