The prospects for renewable energy look good in 2021. The mood around the world has shifted. At opposite ends of the Earth, China has adopted a target to cut net carbon emissions to zero by 2060, while US President Joe Biden rejoined the Paris Agreement on his first day in office. And here in the UAE, the number of renewable projects and amount of new capacity brought online in 2020 will continue to accelerate.
In the world of business, clean energy firms are taking financial markets by storm, as shown by Tesla recently joining the S&P 500 share index as one of its largest members. Meanwhile, tax credits and subsidies have allowed renewable technologies to scale-up significantly in many parts of the world, helping to drive down their costs. Solar and onshore wind farms are now the cheapest new electricity options for up to two-thirds of the global population, according to BloombergNEF.
That’s not all. The 11th Session of the International Renewable Energy Agency (Irena) Assembly announced the foundation of the UN High-Level Dialogue on Energy. The meeting will be the first major UN discussion on energy in over four decades and will give the global community a chance to address progress on the way towards Sustainable Development Goal 7, which was set by the UN in 2015 to ensure access to sustainable energy for all. As the renewable revolution takes hold, we have a historic opportunity to progress to decarbonised power systems in a manner that brings universal access to energy.
Following the Dialogue, which happens in September, all eyes will turn to November's UN Cop26 climate negotiations in the UK. This year, countries are expected to unveil more ambitious climate commitments to support faster progress on the Paris Agreement. A renewable, energy-efficient transition must be at the heart of these plans.
With all of this in mind, 2021 is a year of optimism.
We are particularly keen to monitor exciting redesigns of power systems. A charge often laid against renewables is that they provide an intermittent power source because of their reliance on potentially unreliable weather.
This has been a challenge, but rapidly developing battery technology and reductions in cost now offer solutions. We could also see the emergence of national smart grids that connect regions and territories. This could level the playing field between renewables and other energy sources.
2021 will be a year of problem-solving and solutions, especially as governments invest in green recovery plans to create jobs and cut emissions across the board. Renewable energy deals will increase in 2021 as companies and governments seek ways to meet climate targets.
The 11th Session of the Irena Assembly, which took place virtually from January 18-21, explored this area. Entitled “Covid-19 – Energy Transition”, discussions focused how ideas around a green recovery should inform the future work of the agency. With participation of heads of state, ministers, multilateral organisations and the private sector, the 11th Assembly in the words of its Director General, Francesco La Camera, reassessed “long-standing assumptions, perceived barriers and default decisions” to energy transition that protects out collective future.
Certain themes emerged from the virtual discussions, ones that the assembly agreed would shape the way we work in 2021, a year which many believe could see renewables cement their position as the de facto energy source of the future. Chief among these topics was “convergence and collaboration”.
Given this context, the potential for increased demands in renewable energy signals a possible inflection point. Combined with the electrification of transport systems, heavy industries and oil and gas’s increased participation in the electricity value chain, areas of convergence are emerging. This will bring more innovation to prompt new business models that advance the energy transition.
Another area worth keeping an eye on in the coming year is hydrogen. As we accelerate decarbonisation, many industry stakeholders are looking to hydrogen production and storage to complement wind and solar’s role in cutting carbon emissions. What’s more, green hydrogen’s potential to store energy throughout the seasons could be another reason behind a possible spike in interest.
The time has come for “being renewable” to become less of a corporate buzzword and more of an action point. US tech giants, including Amazon, Google, Apple, Microsoft and Facebook, have for the past five years put renewables front and centre of their corporate social responsibility programmes. We can expect, and should demand, that our corporate cultures ingrain a sense of renewable responsibility in everyone.
Dr Nawal Al-Hosany is a permanent representative of the UAE to the International Renewable Energy Agency
Damilola Ogunbiyi is chief executive and special representative of the UN Secretary General for Sustainable Energy for All and Co-Chair of UN Energy