The business case for renewable energy remains “evident and clear” regardless of the outcome of the upcoming US elections, according to the director general of the International Renewable Energy Agency.
If the Republican candidate Donald Trump wins the November elections, he is widely expected to reverse some clean energy and climate policies, while loosening regulations on oil and gas.
“When Trump won eight years ago, he pulled [the US] out of the Paris Agreement, so this is something that we hope will be avoided,” Francesco La Camera told The National at the World Utilities Congress.
“The world has changed” since Trump’s election win in 2016, Mr La Camera said, adding that “the area where development and business [opportunities] lie is in renewables and clean energy systems”.
Even with tax credits, coal plants in the US were closing during Mr Trump’s tenure because there was no business case for the fuel any more, Mr La Camera said.
In 2022, the US enacted the Inflation Reduction Act, which offers a series of tax incentives on wind, solar, hydropower and other renewables, as well as a push towards electric vehicle ownership. It is expected to spur about $3 trillion of investment in renewable energy technology, according to a Goldman Sachs report from last year.
Experts have said that Mr Trump might struggle to undo some of the climate policies introduced by his predecessor.
“He has not committed to repealing all the tax credits for low-carbon energy in the IRA but has pledged to redirect all the unspent government funds allocated under that law to other infrastructure, such as roads and bridges,” Wood Mackenzie said in a research note on Tuesday.
“Repealing the IRA tax credits would have to be achieved through legislation, and even if former president Trump retakes the White House, he might not have enough support in Congress to do it,” the consultancy added.
Last year, the agency was designated as the custodian for tracking the progress of the global commitment to triple renewable energy capacity and double energy efficiency by the end of the decade.
To stay the course, the world will have to grow renewables capacity at a minimum 16.4 per cent rate annually through 2030, according to the agency’s report from July.
The agency will publish a report on renewable energy on October 8 in Baku, with the ‘Troika’ of UAE, Azerbaijan and Brazil, ahead of Cop29.
Mr La Camera hopes that the report will encourage countries to include practical actions and ideas in their final declarations, which are essential to speeding up progress.
“The direction of travel is there. We are moving to a new energy system, but the speed and scale of this transformation [are not enough to achieve the goal of keeping the temperature increase below 1.5°C],” he added.
Solar energy is currently the only renewable source that’s on track to meet 2050 net zero targets, the International Energy Agency said in a report last year.
Prices of solar modules have fallen in the past decade, primarily due to technological advancements and increased production capacity, making them a more accessible and cost-effective option for homes and businesses.
China, the world's second-largest economy, has played a significant role in driving down costs through its significant investments in manufacturing and supply chains.
Mr La Camera said that solar module prices have continued to drop, despite earlier expectations that they would plateau at some point.
“A couple of years ago, we were saying that we are reaching the moment where investing in a new renewable plant is more convenient than [maintaining] an old one,” he said.
“The question is not about if we will increase the relevance of renewables in the system, because this will happen. The only question is if it will happen soon enough.”
