Power behind the energy transition
G7 Summit

Power behind the energy transition

Transitioning to climate-safe, affordable energy requires farsighted policy choices and wise investments – and cooperation at the international level

As we said in our World Energy Transitions Outlook 2022, anything short of radical and immediate energy transition action will diminish, and ultimately eliminate, our chances to reach a climate-safe 1.5°C. Now is the time to accelerate the transition to a renewable energy future. We do not have the luxury of time to deal with today’s multi-crises of energy security, energy prices and climate urgency separately.

Recent years have dramatically exposed the weaknesses and vulnerabilities of an economic system reliant on a centralised energy system based on fossil fuels. High fossil fuel prices inflict energy poverty and the loss of industrial competitiveness. They leave citizens worried about their energy bills. Therefore, we must carefully consider investing in new fossil fuels, as it will perpetuate existing risks and increase the threat of climate change. We must push for a rapid uptake of renewables.

Today, 80% of the global population lives in countries that are net importers of fossil fuels. By contrast, renewables are available in all countries, offering a way out of import dependency and allowing countries to decouple their economies from the costs of fossil fuels, while driving energy security, economic growth and new jobs.

It is true that our Outlook 2022 sees investment needs of $5.7 trillion per year until 2030. It also calls for a massive shift of money away from fossil fuels and into renewables to avoid stranded assets. But investing in this transition brings tangible socio-economic and welfare benefits to people. It grows the global economy and creates 85 million energy transition-related jobs worldwide by 2030, with more than 26 million additional jobs in renewable energy alone.

Surging commitments

The surge of net zero commitments and industrial policies such as green hydrogen clearly shows that policymakers understand the gravity and complexity of the situation. Indeed, ramping up renewables, together with an aggressive energy efficiency strategy, is the most realistic path towards halving emissions by 2030. But this means tripling the annual deployment of renewables’ power between now and 2030.

Most importantly, there is momentum. G7 members are already engaged in multi-stakeholder discussions about the achievement of net zero pledges at home and the end of coal finance abroad. They increasingly face calls to commit to phase out coal from power generation entirely by 2030.

IRENA has been clear that coal has no place in a Paris Agreement–compliant energy system. Coal can largely be replaced by renewables in ways that are cost effective. Already today, renewable power is the most competitive power option in the world.

Our latest data show that despite global uncertainties, renewables continued to expand, with renewable generation capacity growing by 260 GW last year. This is a trend that must not only continue but must strengthen. In recent months, gas scarcity and high prices have resulted in a slowdown of the global coal phase-out, making an even stronger business case for an aggressive deployment of renewables.

Increased ambition

At COP26 in the UK, countries agreed on the Glasgow Climate Pact. In the pact, countries are asked to increase their ambition further and return to the conference table with enhanced climate pledges by 2030. Although mitigation levels were raised, substantial additional efforts are required to bridge the gap to 1.5°C. The next COP27 in Egypt will have to ensure the ambition becomes a reality.

This first ever African Conference of the Parties will certainly shift perspectives to the Global South. With unsolved issues such as climate finance, adaptation and energy access, delivering on the promise of a just transition will play an even bigger role in unlocking growth and a green deal in Africa.

Truly, the need for a comprehensive policy framework has never been greater at the international level. The G7 must take the lead in enabling a just transition. We are in this together: finances, knowledge, capacities and technologies must be shared for an inclusive and more equitable world.

Getting the energy transition on a fast track requires farsighted policy choices and wise investments. But, most of all, it calls for radical action and extraordinary levels of international cooperation. Will we, the international community, be able to deliver? I believe so, and we at IRENA will do everything in our power to bring it about.