This column is part of a series of exclusive insights before Abu Dhabi Sustainability Week, being held from January 11-18, 2020.
The 2010s will be remembered as the decade when renewable energy went from the marginal to the mainstream. Cost reductions and the growing climate crisis have propelled renewable energy sources into the social and political discourse in almost every country on earth. Of all the major power generation technologies – traditional or renewable – solar accounts for the largest share of additional capacity over the past 10 years.
Encouraging as this progress might be, the hard work is ahead of us. Our actions in the 2020s will define the long-term future of our economies, our people and our planet. Any chance we have of mitigating the climate crisis and achieving sustainable development by mid-century, lies in the policies, investments and emission reductions made this decade. And this critical period of action begins in Abu Dhabi at the 10th International Renewable Energy Agency (Irena) Assembly during Abu Dhabi Sustainability Week.
The 2020s are set to be the decade that redefine our socioeconomic system. If successful, we will have unleashed 10 breathtaking years of energy system transformation putting us well on the way to generating nearly nine tenths of electricity from renewables by 2050. The hard work starts now to ensure that by the end of this decade renewables contribute half of all power generation globally.
It could also be the decade in which demand for both coal and oil peaks, where we see 157 million electric vehicles on our roads and when the last person on earth without reliable and affordable access to electricity is enjoying the benefits of its productive uses. It is possible. To ensure this happens, however, we must urgently address two key things: investment and policy.
Planned energy investments are currently misdirected and should pivot to low-carbon technologies. By our calculations more than $18 trillion of energy investments by 2050 are fossil fuel related, including exploration and production of gas, oil and coal. At best, these investments risk stranding trillions of dollars of assets in uneconomical fuels in just a few years. At worst, they threaten to blow the world’s carbon budget this decade, and with it any hope of a climate safe future.
To hold rising temperatures in the 10 years ahead, annual investments in renewable energy must rise from today’s $330 billion to nearly $750bn per year. Redirecting capital into more socially and economically beneficial low-carbon technologies is imperative and must start now. It is also the most economic pathway to climate action. Inaction will cost up to seven times more than the capital needed to transform the energy system.
The Gulf Co-operation Council countries are taking up the renewable energy race and have everything to gain from moving quickly into a leadership position on future energy. Conservative estimates suggest that by 2030 the region could save more than 350 million barrels of oil equivalent and create close to a quarter of a million new jobs by executing current plans. Solar and wind resources are rich and attractive, and policies have made it cheaper to generate power from renewables than from any other source. Moving from oil, gas pipelines and coal shipments to solar panels and wind turbines strengthens energy security, supports energy independence and builds prosperity for all, not just for the few.
There is no question we are moving in the right direction. In the last decade renewable power generation capacity has doubled and its growth has consistently outpaced fossil fuels since 2012. A third of global power generation capacity today is renewable. This is the result of investments of around $3tn over the past 10 years including large hydro. In the decade of transformation ahead of us however, the next three trillion dollars of renewable investments should take around four years.
Policies must align with the opportunity and reflect the necessity. Under current policies, the peak production of fossil fuels happens somewhere between 2030 and 2035, dramatically out of step with the Paris Agreement which requires a peak in 2020 and a steady, continuous decline from that point. Furthermore, renewable energy targets in nationally determined contributions lag market progress. By 2030 NDCs should target double the amount of renewable capacity they do today.
It is no longer a question of direction but of speed. With policy support, smart investment decision-making and clear recognition of the benefits associated with a renewables-based energy system, the speed of transformation ahead of us could rival the that of any in the post-industrial age. Anything short of this risks everything.
Francesco La Camera is director-general at the International Renewable Energy Agency
