Global energy transition has made progress but falls short of 1.5°C pathway: Report

The aftermath of the Covid-19 pandemic and the ripple effects of the Ukraine crisis have further compounded the challenges facing the transition, it said.

Deployment is also limited to certain parts of the world, the report pointed out. China, the European Union and the United States accounted for two-thirds of all additions last year, leaving developing nations further behind.

It said that public sector intervention is required to channel investments towards countries more equitably. In 2022, 85 per cent of global renewable energy investment benefitted less than 50 per cent of the world’s population. Africa accounted for only 1 per cent of additional capacity in 2022. Regions home to about 120 developing and emerging markets continue to receive comparatively little investment.

“A fundamental shift in the support to developing nations must put more focus on energy access and climate adaptation. Moving forward, multilateral financial institutions need to direct more funds, at better terms, towards energy transition projects and build the physical infrastructure that is needed to sustain the development of a new energy system,” said IRENA’s director-general Francesco La Camera, in a statement.

“A profound and systemic transformation of the global energy system must occur in under 30 years, underscoring the need for a new approach to accelerate the energy transition. Pursuing fossil fuel and sectoral mitigation measures is necessary but insufficient to shift to an energy system fit for the dominance of renewables. The emphasis must shift from supply to demand, toward overcoming the structural obstacles impeding progress,” he added.

IRENA’s preview outlines three priority pillars of the energy transition, the physical infrastructure, policy and regulatory enablers and well-skilled workforce, “requiring significant investment and new ways of co-operation in which all actors can engage in the transition and play an optimal role”.

Although global investment in energy transition technologies reached a new record of $1.3 trillion in 2022, yearly investments must more than quadruple to over $5 trillion to stay on the 1.5 degrees Celsius pathway.

By 2030, cumulative investments must amount to USD 44 trillion, with transition technologies representing 80 per cent of the total, or $35 trillion, “prioritising efficiency, electrification, grid expansion and flexibility”.

Some 41 per cent of planned investment by 2050 remains targeted at fossil fuels. Around USD 1 trillion of planned annual fossil fuel investment by 2030 must be redirected towards transition technologies and infrastructure to keep the 1.5°C target within reach, the report said.

Current pledges and plans fall well short of IRENA’s 1.5°C pathway and will result in an emissions gap of 16 gigatonnes (Gt) in 2050.

Nationally Determined Contributions (NDCs), long-term low greenhouse gas emission development strategies (LT-LEDs) and net-zero targets, if fully implemented, could reduce carbon dioxide (CO2) emissions by 6 per cent by 2030 and 56 per cent by 2050, compared to 2022 levels. However, most climate pledges are yet to be translated into detailed national strategies and plans, implemented through policies and regulations, or supported with sufficient funding, the report found.