The UAE sets a good example with its support for renewable energy
In 2014, the world has seen a dramatic shift in the fight against climate change.
In May, the UAE hosted Abu Dhabi Ascent, a high-level meeting to generate momentum for the UN Climate Summit. In September, during the summit, millions of people participated in the biggest climate march in history. In November, the Intergovernmental Panel on Climate Change issued its starkest warning yet: that countries must reduce carbon dioxide emissions or face catastrophe.
This month, 193 countries convened in Lima, Peru, to draft the text for a global climate agreement ahead of a meeting in Paris next year. A global understanding has emerged that the time for action is firmly upon us.
Governments are beginning to rise to the challenge. In November, China and the US announced efforts to reduce domestic emissions. More than 20 countries have pledged $10 billion (Dh36.73bn) for a Green Climate Fund, which has the potential to leverage many billions more in private investment.
But of all these recent developments, one trend stands above all others in terms of offering a solution to the climate challenge: as costs for renewable energy technologies continue to fall, the business case for renewable energy has never been stronger.
Over the past five years, the cost of solar panels has fallen by 75 per cent. Onshore wind has become the most affordable option for new grid supply in many countries worldwide – even in countries with cheap shale gas.
A technology that was once considered alternative has gone mainstream. Investment in renewable generating capacity has exceeded that of fossil fuels for three years running, topping $250 billion a year.
New sources of financing for renewables are rising fast. Green bonds will have raised a predicted $37 billion by the end of the year: more than double that in 2013. Next year, they could increase by another $100 billion.
Analysis by the International Renewable Energy Agency (Irena) shows that we now have the technology and the know-how to double the global share of renewable energy by 2030, from 18 to 36 per cent. Coupled with improvements in energy efficiency, this could be enough to avert climate disaster, at a cost lower than meeting our energy demand with fossil fuels.
The rise of renewables allows us to cut the intractable challenge of climate diplomacy, in terms of who pays and who benefits. With clean energy, we all benefit.
So why worry? If renewable energy is already cost-effective, won’t markets take care of the transition organically?
Under a business-as-usual scenario, Irena projects that instead of doubling the world’s share of renewable energy by 2030, we will reach only 21 per cent.
This is because this transition has moved beyond a question of cost. It requires a complete rethinking of the energy system.
Where traditionally we would generate power in large centralised utilities, renewable energy is variable, distributed and the flow of electricity goes both ways. Consumers are becoming producers, and new players are entering the market, including retailers, technology companies, and community organisations.
These changes demand new business models, new management systems, smart metering and advanced storage. They require us to build more interconnectors in upgraded grids. And they require new forms of public finance to reduce risk.
Governments also need to level the playing field by reconsidering subsidies to fossil fuels. And we must expand the renewable energy revolution beyond power. More than three-quarters of the energy we use is for heating and transport. We need to support green buildings, sustainable transport and biofuels for industry.
None of this will be easy. But the world has switched energy systems before, and enjoyed great leaps in prosperity. It will again. We just need to speed things up.
The UAE, through its support for Irena and the vision that Masdar represents, has set a powerful example of the bold innovative thinking that is required to make this shift. The fact that a country whose prosperity is based on fossil fuels is making such a big bet on renewables sends a powerful signal around the world.
But we must now move beyond signals and on to action. It is time for us to make the transition to a renewable energy system a reality. We can no longer afford not to.
Adnan Z Amin is the director- general of the International Renewable Energy Agency (Irena)
Published: December 11, 2014 04:00 AM