Key Enablers to Triple Renewables by 2030: Policy and Regulations

The UAE Consensus agreed at COP28 to triple global renewable energy capacity and double energy efficiency gains by 2030 requires countries to overcome structural barriers impeding the energy transitions progress. The World Energy Transitions Outlook by the International Renewable Energy Agency (IRENA) identifies these barriers and the key enablers that create conducive conditions for an accelerated transition.

Siloed policy making is one of the barriers identified. It has been hindering the systemic shifts required in energy policy and planning. Policy makers play a crucial role in supporting the shifts by adapting market structures, eliminating distorting fossil fuel subsidies and establishing effective carbon pricing mechanisms. Turning the COP28 pledge into reality and increasing renewable power capacity dramatically in these remaining 7 years to 11.2 Terawatts thus calls for urgent policy interventions.

Forty-one out of 51 IRENA members that participated in a survey conducted in preparation for the next Nationally Determined Contributions (NDCs) submission echoed the need to improve policies and regulations to advance the energy transitions. Following the UAE Consensus, countries are to consider the tripling renewables target for their next NDCs submission while reflecting their different starting points and national contexts.

The Members’ responses are in line with IRENA’s recommendations for policy makers to meet the new challenges and current needs by:

• Placing the energy transition at the core of national economic/development strategies.
• Aligning sector/cross-sector policies to promote renewable deployment and other transition-related solutions.
• Adapting policies and measures to market realities.
• Adjusting policies to support renewables industry (e.g. auction ceiling prices more reflective of true costs).

In the above-mentioned survey, Members also highlighted the necessity to have various policy and regulatory options. Following these, 33 countries mentioned carbon pricing instruments and/or Paris Agreement Article 6 market mechanisms, while 32 of them included electric mobility policies and regulations.

Latest assessment shows that current commitments and targets are not sufficient to decarbonise the transport sector as required by the Paris Agreement. Of the 140 countries that had submitted second-round of NDCs in August 2023; 23 countries have set a greenhouse gas (GHG) emissions reduction target for transport, 135 countries have set targets for transport that do not include explicit GHG emissions reduction targets, while 92 countries’ Long-Term Low Emission Development Strategies submissions include climate mitigation actions for transport.

An upcoming IRENA report underscores the leading role of policies for the transition of road transport. Countries are urged to set ambitious electric vehicles (EV) targets and clear timeline aligned with the Paris Agreement to phase out fossil fuel use in road transport, sending signals to investors and carmakers. Policies that improve the systemic efficiency of transport activity and travel behaviour are needed.

Electric vehicles and charging infrastructures will need to play a major role in driving an accelerated transition. Apart from electrification, three areas in policy making are discussed as measures to decarbonise the transport sector; avoid (unnecessary motorised transport), shift (to more efficient modes), and improve (vehicle efficiency). The avoid-shift-improve framework is helpful for exploring all potential decarbonisation policies, but the categories should not be thought of as mutually exclusive.

The decarbonisation of road transport will require implementing a number of policies to promote energy efficiency and the use of renewables, which helps drive the demand for more renewables deployment. Electric two and three wheelers have the potential to offer a cost-effective option for road transport decarbonisation in developing countries. They can bring multiple environmental and socio-economic benefits to local communities. Policies would need to incentivise innovative business models and address barriers related to costs, battery and safety.

But as IRENA’s analysis has demonstrated, successful policy making cannot be restricted to a single sector. The energy transition that will lead to the fulfilment of the tripling renewables pledge is one that is experienced as just and equitable across different sectors, communities, countries and regions. This implies that policy making must be embedded in, or linked to, efforts to narrow the vast inequities between rich and poor, make economies more sustainable, and mitigate the climate crisis.