REthinking Energy: renewable energy and climate change

REthinking Energy: renewable energy and climate change

Renewable energy offers an immediate means to decarbonise the global energy mix. Doubling the share  of  renewable energy by 2030 could deliver around half of the required emissions reductions and, coupled with energy  efficiency, keep the average rise in global temperatures below 2 °C and prevent catastrophic climate change.

IRENA’s analysis shows that global annual investment in renewables can reach USD 900 billion by 2030. In order to avoid lock-in with unsustainable energy systems, annual investments between now and 2020 should reach USD 500 billion, almost a doubling from current levels of investments. For successful climate action, the renewable share must continue to increase in electricity but must also rise in transport, heating and cooling.

This report offfers five actions for a sustainable energy future:

  • strengthen the policy commitment to renewable energy. Enabling policies and regulatory frameworks create stable and predictable investment environments, help to overcome barriers, and ensure predictable revenue streams for projects. Setting renewable energy targets and formulating dedicated policies to implement them provides strong market signals, reflecting government commitment to the sector’s development. Depending on the national context, complementary measures can level the playing field for renewables through the introduction of appropriate energy pricing structures
  • mobilise investments in renewable energy. Public funding will remain an important catalyst and will need to increase, but the lion’s share of new investment in renewables will have to come from the private sector. To mobilise private investment, the strategy pursued must focus on risk mitigation instruments and structured finance tools to develop a strong pipeline of projects, and to unlock project financing and refinancing opportunities. To scale-up investments in developing countries, dedicated risk mitigation facilities are needed using both climate finance and traditional development finance channels
  • build institutional, technical and human capacity to support renewable energy deployment. Clarity of institutional roles accompanied by transparent and streamlined procedures can reduce transaction costs and make projects more attractive. From policy and regulatory design to project preparation, evaluation, development and financing, a wide array of skills needs to be built up in government ministries, financing institutions and regulatory agencies. Coordination is also vital between the different stakeholders in order to ensure, for instance, that physical infrastructure and complementary regulations, such as grid codes, keep pace with accelerating renewable energy development
  • harness the cross-cutting impact of renewable energy on sustainable development. Achieving the Sustainable Development Goal (SDG) on energy will transform the energy system while helping meet other SDGs such as for health, poverty alleviation, water and cities. Access to reliable, cost-effective and environmentally sustainable modern energy services can have a multiplier development impact in both advanced and access contexts. In particular, renewable energy solutions can expand electricity access, increase productivity, create jobs, improve water security and bolster poverty alleviation efforts. The wider sustainable development impact of renewable energy must be taken into account when strategies for the implementation of SDGs are developed
  • enhance regional engagement and international cooperation on renewable energy development. Regional approaches and common initiatives can reduce costs, generate economies of scale, attract investments, boost financial capacity, stimulate cross-border trade and enable common progress in accelerating the deployment of renewable energy worldwide. To meet national goals and ambitions, countries would benefit from concerted action that regional and international cooperation offers. Governments should tap into opportunities for engagement and cooperation on renewables and climate mitigation

 

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