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Tripling Renewable Energy Capacity Is Possible, But 2023 Didn’t Help

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Tripling Renewable Energy Capacity Is Possible, But 2023 Didn’t Help

Despite the record clean energy capacity additions in 2023, leading agencies and market analysts warn that the world is falling short of the trajectory required for a 1.5°C-aligned scenario. Can the G7 and G20 take action to help us change course?

12 May 2024 – by Viktor Tachev   Comments (1)

At COP28, over 130 countries agreed to the historical goal of tripling renewable energy capacity and doubling energy efficiency by 2030. If nations succeed, the world should have at least 11 TW of clean energy capacity by the decade’s end. Such a move will result in a 43% reduction in emissions, which aligns with the IPCC’s requirements. However, IRENA finds that the world is falling short of the needed trajectory, while Ember identifies the G7 as laggards. As a result, policy-makers now have a mounting challenge to act urgently and accelerate deployment substantially.

IRENA: Record Renewable Energy Capacity Deployment in 2023

IRENA’s Tracking COP28 Outcomes: Tripling Renewable Power Capacity by 2030 report found that in 2023, renewable energy capacity additions saw unprecedented growth, totalling 473 GW. Clean power accounted for a record 87% of newly installed capacity. Solar power was responsible for 73% of this growth.

Annual Installed Power Capacity Additions, 2003-2023, Source: IRENA
Annual Installed Power Capacity Additions, 2003-2023. Source: IRENA

Progress Towards the COP28 Goal to Triple Renewable Capacity Remains Inadequate

Despite the record deployment, IRENA notes that the world is falling way behind the needed 11 TW of annual new renewable power capacity additions. Of all technologies, only solar PV remained on track for a 1.5°C-aligned scenario.

Renewable Capacity Additions in 2023, Source: IRENA
Renewable Capacity Additions in 2023. Source: IRENA

Deployment of other clean technologies is stalling. The development of EVs and electrolyser capacity for green hydrogen production fell short of the required trajectory. This is also the case for investments in renewable power generation, grids and flexibility.

Clean Technology Progress, Source: IRENA
Clean Technology Progress. Source: IRENA

To keep the 1.5°C target within reach, the difference now has to be made up for in the following years. This further increases the annual capacity goals for the remainder of the decade. 

While solar and wind massively dominate renewables deployment, the growth remains highly concentrated in several markets. China, the EU and the US collectively accounted for 83% of the additions. China even reached a new milestone, having 85% of its new capacity originating from renewables. According to IRENA, the main driver for this trend was the decreasing costs of utility-scale solar and wind power. It has made clean power sources competitive with coal and gas power.

IRENA also notes that most developing countries have been left out of the transition despite their significant energy demand and abundant clean power potential. As a result, they risk missing out on the opportunities that renewables open in overcoming development and energy access challenges.

Another alarming finding is that public finance is shrinking. According to IRENA’s estimates, China aside, the 154 emerging market and developing economies received just 14% of global energy transition investment in 2023, despite accounting for two-thirds of the global population. On a per capita basis, advanced economies attracted five times more investment.

Despite Their Crucial Roles, the G7 and G20 Are Failing to Lead the World

Ember urges the G7 to lead the way in tripling renewable energy capacity by 2030. Despite signing on to the goal, the group is currently only targeting to double the amount. In total, the identified gap is 0.7 TW.

The level of ambition among the G7 varies, with many nations having a lot of work to do.

renewable targets varies
Source: Ember
Source: Ember

According to Ember, Asia needs to increase its clean energy capacity by more than three times for the world to succeed in the global goal.

Required Increase in Clean Energy Capacity Deployment by 2030, Source: Ember
Required Increase in Clean Energy Capacity Deployment by 2030. Source: Ember

To bring progress to the needed levels, Ember urges the G7 to commit to a goal of tripling G7 renewable capacity from 0.9 TW in 2022 to 2.7 TW in 2030. Furthermore, it stresses the importance of G7 leaders to help unlock clean energy growth across emerging countries by designing and presenting an action plan at COP29. 

In a separate analysis, Climate Analytics estimates that to do their part to limit warming to 1.5°C, G7 countries should aim for a 58% emissions reduction target by 2030. Currently, not only is the group’s collective target of 40-42% in reductions by 2030 insufficient, but current policies will likely fail to deliver, ensuring a potential emissions reduction of only between 19% and 33%. Furthermore, the analysis finds no G7 member is on track to meet its existing targets. 

The report’s authors also urge G7 nations to commit to phasing out domestic coal and fossil gas power generation by 2030 and 2035, respectively. Ending international public fossil fuel project financing, setting new and more ambitious climate financing pledges and developing new innovative energy transition financing mechanisms to assist vulnerable developing economies are also imperative.

“These economies, who make up 38% of the world’s GDP, are not pulling their weight: they have both the technology and the finance to up their game. Against the backdrop of unprecedented climate extremes exacerbated by the use of fossil fuels, taking ambitious action to decarbonise and setting a deadline to move away from fossil fuels should be the bare minimum,” says Neil Grant, the lead author of the analysis.

On a broader scale, the G20 also has a lot of work to do. According to IRENA’s 1.5°C Scenario, to make up for the subpar progress, the G20 would need to grow its renewable power capacity from under 3 TW in 2022 to 9.4 TW by 2030. This equals over 80% of the global total. The NDC commitments from October 2023 account for less than half of what the global commitment to triple renewable power capacity requires.

Furthermore, IRENA finds that G20 members alone provided a record USD 1.4 trillion in public funds to support fossil fuels in 2022. The funds came in the form of subsidies, investments by state-owned companies and public lending activities.

Other challenges to achieving the tripling goal include increasing financing costs, reducing supply chain bottlenecks for particular clean technologies and gaining adequate government support and financing.

Urgent Action Remains Critical

IRENA says that the global energy transition remains “clearly off track”, and it must get back on track immediately. Any delay will further magnify the challenge. 

The agency says that adding an additional 7.2 TW in renewable power will help triple renewable energy capacity by 2030. The feat is technically feasible and economically viable. While the trends in clean energy deployment are positive, current projections for the years up to 2030 suggest the world will likely miss the tripling target without timely policy interventions and significant investments.  

Regarding solutions, the experts note that no shortcuts are available. Instead, they advise more focused global action that is aligned around key priorities.

IRENA's List of Priorities For Getting Back on Track with the Goal of Trippling Renewables By 2030, Source: IRENA
IRENA’s List of Priorities For Getting Back on Track with the Goal of Tripling Renewables By 2030. Source: IRENA

Modernising and expanding existing renewables infrastructure and investing in power system operation solutions, including grid and storage, will go a long way towards achieving this goal. Improving the regulatory frameworks through streamlining project permissions and enhancing market design to accommodate the expected clean energy boom is also integral, while improving institutional and human resources, and a skilled workforce, to answer the needs of the green energy transition is also critical.

Another focus point is speeding up the deployment of all available clean energy technologies across all regions.

IRENA urges a greater focus on international cooperation, in which multilateral development banks and global financial institutions accelerate finance provision. Scaling up and broadening access to low-cost finance also remains critical. Currently, renewable energy investments are mainly reliant on private capital, which increases the cost. According to IRENA, the key is blended project financing.

Most importantly, the agency stresses that if the world is to align with a 1.5°C scenario, the growth in clean energy deployment should be paired with a corresponding decline in fossil fuels. Both of those requirements are currently lacking. However, policy-makers have all the tools needed to live up to their crucial role of supporting the shift to renewable energy – eliminating distorting fossil fuel subsidies and establishing effective carbon pricing mechanisms.

Tripling Renewable Energy Capacity is Possible If Everyone Work Together

IRENA’s Director-General Francesco La Camera says that leaders can no longer afford delays and generic statements or expect others to lead or take action. Instead, he urges a joint effort where parties put all available knowledge, technologies and capital to work to correct the course of the global energy transition.

Doing so will not only bring the world closer to the required emissions reduction trajectory to get closer to the Paris Agreement’s goals but also pave the way for a more equitable and inclusive world.

by Viktor Tachev

Viktor has years of experience in financial markets and energy finance, working as a marketing consultant and content creator for leading institutions, NGOs, and tech startups. He is a regular contributor to knowledge hubs and magazines, tackling the latest trends in sustainability and green energy.

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