How an accelerated transition to renewables can mitigate the energy and climate crisis?

Events of recent years have accentuated the cost to the global economy of a centralised energy system highly dependent on fossil fuels. Oil and gas prices are soaring to new highs, and the COVID-19 pandemic continues to hamper recovery efforts.

At the same time, the impacts of human-caused climate change are increasingly evident around the globe.

Given the inadequate pace and scope of the transition, anything short of radical and immediate action will diminish – possibly eliminate – the chance of staying on the 1.5°C or even 2°C path.

IRENA’s analysis positions electrification and efficiency as key drivers of the energy transition, enabled by renewables, hydrogen, and sustainable biomass.

The technological avenues leading to a decarbonised energy system are clear. They are dominated by solutions that can be deployed cost-efficiently, rapidly and at scale.

Achieving net zero emissions requires the global energy consumption decrease of 11% from 2019 levels though ambitious energy efficiency improvements, with a simultaneous increase in the share of renewables in the global energy mix – from 19% in 2019 to 79%, including a ten-fold increase in renewable electricity capacity by 2050.

The 2022 edition of World Energy Transitions Outlook sets out priority areas and actions by 2030.

Progress will depend on political will, well-targeted investments, and a mix of technologies, accompanied by policy packages to put them in place and optimise their economic and social impact.

The top priorities will have to be pursued simultaneously to put the energy transition back on track to the 1.5°C goal.

In recent months, gas scarcity and high prices have resulted in a slowdown of the global coal phase out, making an even stronger case for more aggressive deployment of renewables.

It is evident that the phase out is a complex task for countries heavily reliant on coal, especially given the imperative of a just and fair transition for affected workers and communities.

Concerted action and international cooperation are therefore essential for timely progress. Phasing out fossil fuels assets should be done in tandem with measures to eliminate market distortions and incentivise energy-transition solutions.

Renewables would have to scale-up massively across all sectors from 14% of total energy today to around 40% in 2030.

Ramping up renewables, together with an aggressive energy efficiency strategy, is the most realistic path toward halving of emissions by 2030, as recommended by the Intergovernmental Panel on Climate Change (IPPC).

Most of the time in the power sector, renewables are increasingly faster and cheaper to deploy than the alternatives. But to meet the climate goal, annual additions of renewable power capacity will have to be three times the current rate of deployment.

In 2021 only 0.5 GW of electrolysers were installed but the cumulative installed capacity needs to grow to some 350 GW by 2030.

Hydrogen commands a great deal of policy attention, so the coming years should bring concrete actions to develop the global market and reduce costs.

In this regard, the development of standards and guarantees of origin, along with support schemes to cover the cost gap for green solutions, will ensure that hydrogen offers a meaningful contribution to climate efforts in the long term.

Modern bioenergy’s contribution to meeting energy demand, including demand for feedstock, will have to triple by 2030.

At the same time, the traditional use of biomass, such as firewood used in inefficient stoves, needs to be replaced by clean cooking solutions.

There is scope for biomass supply to expand, but the expansion will need to be managed carefully to ensure sustainability and minimise adverse outcomes.

Policies that promote the wider use of bioenergy need to be coupled with strong, evidence-based sustainability procedures and regulations.

A comprehensive set of policies covering all technological avenues is needed to achieve the necessary levels of deployment by 2030.

Deployment policies should support market creation, thus facilitating reductions in technology costs and their scale-up and increases in investment levels aligned with energy transition needs.

Only a holistic global policy framework can bring countries together to orchestrate a just transition that leaves no one behind and strengthens the international flow of finance, capacity and technologies.

By 2030, the energy transition promises the creation of 85 million additional energy transition-related jobs compared to 2019 and support a boost in global gross domestic product (GDP).

The additional 26.5 million jobs in renewables and 58 million extra jobs in energy efficiency, power grids and flexibility, and hydrogen more than offset losses of 12 million jobs in the fossil fuel and nuclear industries.

60% of the global population stand to reap greater benefits under the 1.5°C Scenario than under the competing business-as-usual scenario.

Achieving universal access to modern energy by 2030 is a vital pillar of a just and inclusive energy transition aligned with the 1.5°C goal. Despite advances, the universal energy access goals of United Nations Sustainable Development Goal 7 are in jeopardy.

An estimated 758 million people were living without electricity globally in 2019. 2.6 billion had no access to clean cooking fuels and technologies.

Decentralised renewable energy solutions can play a crucial role in solving the access problem while supporting the delivery of essential services and income-generating activities across sectors.

Sharp adjustments in capital flows and a reorientation of investments are necessary to align energy with a positive economic and environmental trajectory.

The 1.5°C Scenario will require investments of USD 5.7 trillion per year until 2030.

IRENA estimates that USD 0.7 trillion in annual investments in fossil fuels should be redirected towards energy transition technologies.

Most of the additional capital is expected to come from the private sector. But public financing will also have to double in order to catalyse private finance and create an enabling environment for speedy transition with optimal socio-economic outcomes.