International Renewable Energy Agency (Irena) director-general Francesco La Camera has warned that the global energy transition is off-track and called for a fundamental course correction.

He noted in an address during the Berlin Energy Transition Dialogue, which was hosted on March 28, that a successful energy transition demanded bold and transformative measures that reflected the urgency of the present situation; however, he added that the effects of multiple global crises had frustrated these efforts.

La Camera shared details of Irena’s ‘World Energy Transition Outlook (WETO) 2023' preview, which states that investment and comprehensive policies globally and across all sectors must prioritise renewable energy and instigate the structural changes required for a renewables-based transition.

The full WETO will be published later this year.

In the meantime, the preview shows that the scale and extent of change fall far short of the 1.5 ˚C pathway, in terms of the Paris Agreement, although some progress has been made in the power sector.

Irena finds that renewable energy now accounts for 40% of installed power generation globally, contributing to an unprecedented 83% of global power additions in 2022.

“However, to keep within the 1.5 ˚C pathway, deployment levels must grow from 3 000 GW today to more than 10 000 GW in 2030 – an average of 1 000 GW a year.

“Deployment is also limited to certain parts of the world at the moment, with China, the European Union and the US accounting for two-thirds of all additions in 2022, leaving developing nations behind,” La Camera said.

He added that the stakes were at their highest for drastic climate change impacts, should a profound and systemic transformation of the global energy system not occur before 2050.

Irena believes the emphasis should shift from supply to demand, towards overcoming the structural obstacles impeding progress.

PARTICULAR TARGETS

In the WETO 2023 preview, Irena outlined three priority pillars of the energy transition: the physical infrastructure, policy and regulatory enablers and a well-skilled workforce, requiring significant investment and new ways of cooperation 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 °C pathway.

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

Any new investment decisions should be carefully assessed to simultaneously drive the transition and reduce the risk of stranded assets.

Irena says about 41% of planned investment by 2050 remains targeted at fossil fuels.

“Around $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 intergovernmental organisation adds.

Moreover, public sector intervention is required to channel investments towards countries in a more equitable way. In 2022, 85% of global renewable energy investment benefitted less than 50% of the world’s population. Africa accounted for only 1% of additional capacity in 2022.

Irena’s ‘Global Landscape of Renewable Energy Finance 2023’ report confirms that regions home to about 120 developing and emerging markets continue to receive comparatively little investment.

La Camera stressed the need to rewrite the way international cooperation worked. He said achieving the energy transition required stronger international collaboration, including collective efforts to channel more funds to developing countries.

“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.”