Political spirit for renewable energy has rapidly gained ground, but the speed and scale of this transformation are not enough – the rules must be rewritten so everyone can use and consume energy
Why is a fast renewable energy transition necessary, given the evidence about extreme weather events and soaring hydrocarbon energy prices?
If you reverse the question you have the answer. We need the energy transition to build a new system in line with achieving the Paris Agreement goals and to assure more resilience. We need to accelerate it because today’s crises show that a centralised system based on fossil fuels can no longer support development. All this makes it clear that the speed and the scale of the transition today put the 1.5°C and 2°C goals at risk if we don’t act immediately.
What advances have we made this year?
The energy transition is already in place. Over the past decade, the newest public capacity of renewables has systematically outpaced the traditional capacity and it’s continuing year after year. Last year 80% of the new installed capacity was renewables. We have seen the costs of renewables decrease by around 15% for the third consecutive year. Renewables now compete with the most competitive fossil fuels in four fifths of the planet. The share of renewable electricity is growing month after month, and renewable energy sources have not been much affected by Covid-19.
We see good engagement by China, India, Indonesia, and some African countries. G7 members have all committed to 100% clean power by 2035. That we have to translate into reality. The political spirit is surely more positive today.
But the speed and the scale of this transformation are not enough. There is still much to do.
What forms of renewable energy hold the most promise?
I have no favourite child! I consider renewables in a holistic way. There has been a lot of attention given recently to hydrogen, especially green hydrogen. Energy efficiency and electrification are driving the transition, and renewables complemented by hydrogen and bioenergy will be the technological avenue to achieving the Paris Agreement. We have to optimise the promising technologies we already have: electrification, efficiency, enabled by renewables, hydrogen and green hydrogen, and bioenergy. Geothermal, especially in Indonesia and other countries, is getting attention in the initial phases where the risk of investment is there, so we have to ensure derisking investment during exploration for new sites.
How can renewable energy technologies be developed in emerging economies and developing countries?
Sometimes when we talk about a just transition, we talk in neutral ways: reskilling and retraining for people losing their jobs or entering new technologies. But the just transition is more than that. It must decrease inequality. Renewables can be very important, especially regarding related supply chains. We strongly hope that international cooperation will bring countries to look at competition more collaboratively, so they can help emerging economies and developing countries build their green industries, for a balanced energy system that provides more jobs, more wealth and a better future for those countries.
What major challenges remain?
The legal rules were written to serve an energy system that was centralised and based on fossil fuels. Now we’re moving to a decentralised system with more actors, so the rules need to be rewritten so everyone can use and consume energy, and where exports will be mainly regional. We need a legal system that enables markets to play a role in ensuring the acceleration of this transition.
What about climate finance?
At IRENA we are trying to do more. To support investment choices for the multilateral financial system, we are working on global outlooks as well as regional and, in some cases, domestic ones. We are joining hands with countries so they own their plans and can better make their choices. We are also engaged through our financial initiatives, with the Climate Investment Platform, the Energy Transition Accelerating Financing Platform, the Abu Dhabi Fund for Development, Masdar and other financial institutions. The Investment Forum held in Bali in August – organised back-to-back with the G20 energy ministers’ meeting – could ensure continuity and add another push towards implementing national plans.
How can the G20 leaders at their summit help?
I hope the Bali Summit will deliver a strong message to rebuild how we cooperate, so competition continues to be the engine of progress but also offers more collaborative efforts for building green industries in developing countries, redrafting supply chains to give more room for developing countries to grow, and producing more jobs and more possibilities for people to live a life that is worth living. Such a strong call will ensure the energy transition will reduce existing inequalities.