The global energy system is undergoing rapid and disruptive change. The way we produce, distribute and consume energy is being fundamentally transformed.
Renewables are at the heart of this new energy age. Since 2012, the majority of all new power-generation capacity added globally came from renewables, which are getting cheaper and cheaper with every day. Analysis by the International Renewable Energy Agency (IRENA) estimates that by 2020, renewables will be cost competitive with fossil fuels in most parts of the world, undercutting them significantly in many cases.
Accelerating energy transformation
G20 members are at the forefront of this energy transformation: China, for example, added a world record of 53 gigawatts of solar photovoltaics last year, and just a few months ago, the European Union decided to increase its renewables target to 32% in total final energy consumption by 2030. Germany aims to reach 65% renewables in its power mix by 2030. This list continues.
But despite the ongoing efforts, an acceleration of energy transformation is urgently needed if we want to avoid the worst effects of global warming and instead enjoy the full breadth of benefits that renewables can provide. As the recent report published by the Intergovernmental Panel on Climate Change highlighted, we have only 12 years left to keep the global temperature rise below 1.5°C of pre-industrial levels. We need to take immediate and unprecedented action.
roadmap to 2050
Renewables are, in combination with energy efficiency, the key to uncoupling economic growth from an increase in emissions. IRENA’s Global energy transformation roadmap to 2050 estimates that together they can provide more than 90% of the energy-related carbon dioxide emission reductions required to keep the global temperature rise to 2°C. This would require a share of two-thirds renewables in total final energy consumption by 2050. A deployment of renewables and energy efficiency solutions at that scale would boost global gross domestic product by more than $50 trillion, creating 11 million additional jobs along the way – not to mention the host of social benefits this would entail, such as improved health, clean water and living environments, and more.
What the G20 can do
The G20 is well positioned to lead the way on global energy transformation. IRENA analysis estimates that G20 countries hold 75% of the global renewables deployment potential by 2030. In cooperation with the G20 presidencies of Turkey, China and Germany in the past three years, IRENA has provided targeted analysis and recommendations for the energy discussions at the G20. Building on this work, we cooperated with the Argentinian presidency this year to prepare an overview of opportunities to accelerate energy transitions through enhanced deployment of renewables. This analysis highlights that there is much room for further improvements to the regulatory, policy and institutional framework settings of the G20 members.
Upgraded targets and market-based support schemes such as competitive procurement programmes can provide the certainty that industry requires to invest in the necessary innovation, infrastructure and supply chains. Auctions have established themselves as a procurement tool, leading to record-breaking prices for renewables. Collectively, there is also an opportunity for the G20 to promote renewables by developing internationally harmonised technical standards and quality controls, and by facilitating investments in renewable energy research and development.
But if we want to make the energy transition a reality, we cannot stop at high shares of renewables in power generation. Policy support needs to be scaled up in all end-use sectors, including transport, industry and buildings.
Scaling-up policy support
This requires sectoral approaches to be coupled with systems-wide perspectives to reduce the direct use of fossil fuels in end-use sectors, shifting instead to electricity generated from renewables. Hydrogen could be the missing link for electrification in some contexts; for example, power-to-gas could facilitate the integration of large amounts of renewables in sectors that are more difficult to decarbonise, such as transport. IRENA’s recently released Hydrogen from Renewable Power: Technology Outlook for the Energy Transition shows that the appropriate technologies are already available, but their application would need to grow to a scale large enough to yield the cost reductions that would be necessary for their commercialisation. The G20 could make the difference by creating the policy frameworks that are required for this.
The Buenos Aires Summit is a great occasion for the G20 to send a strong signal to the world on its resolve to accelerate energy transition. The opportunities that present themselves to the G20 to take action are plentiful and, clearly, the potential rewards for demonstrating leadership are too significant to be ignored.