The world has made some progress toward the target of keeping global warming to 1.5 degrees Celsius, but more has to be done to stay on course. By 2030, $35 trillion must be invested to enable the energy transition.
Efficiency, electrification, grid expansion, and flexibility should be prioritized in future investments in energy transition technologies, according to the International Renewable Energy Agency (IRENA) in its Global Energy Transitions Outlook (WETO). On Tuesday, the latest report was released in Berlin.
IRENA expressed anxiety as it asked for “strong, transformative measures” as global investment in energy transition technologies reached USD 1.3 trillion last year, but the yearly total should be more than USD 5 trillion to stick to the 1.5 degrees C scenario and in line with Paris Agreement goals. To keep the goal within reach, it is estimated that about USD 1 trillion of annual fossil fuel investment anticipated by 2030 must be shifted toward transitional technologies and infrastructure.
According to IRENA’s capacity projections, deployment targets must increase by an average of 1,000 GW per year from today’s 3,000 GW to over 10,000 GW in 2030. As deployments are presently limited mainly to China, the US and the European Union, which were responsible for 66% of last year’s new additions, increased investments are needed to back developing countries and emerging markets so that greater focus is put on energy access and climate adaptation.
With renewable energy sources already making up 40% of the world’s installed power generation capacity, IRENA emphasized the progress made toward the 1.5 degrees Celsius goal in the power sector. Over 83% of the world’s total power capacity increases in 2022 came from renewable sources, which deployed a record-breaking 295 GW of capacity.