While short-term solutions to the current energy crisis are necessary, it is important that we remain focused on the long-term and mid-term goals of the energy transformation. World Energy Transitions Outlook 2022 states that high fossil fuel prices, energy security issues, and the urgency of climate changes all indicate the urgent need to move faster toward a clean energy system.
Launched by the International Renewable Energy Agency (IRENA) at the Berlin Energy Transition Dialogue, the agency’s Outlook sets out priority areas and actions based on available technologies that must be realized by 2030 to achieve net zero emissions by mid-century. It also reviews progress across all energy sources, clearly demonstrating the slow pace and insufficient scale of the renewables-based transition.
The outlook shows that there will be an investment need of $5.7 trillion annually until 2030. This includes the imperative to shift $0.7 trillion annually away fossil fuels to avoid stranded properties. Investing in the transition would have concrete socioeconomic and welfare advantages, creating 85 million new jobs in renewables and other transition-related technologies worldwide between now and 2030. These job gains will far surpass the 12 million losses in the fossil fuel industry. According to the Outlook, the energy transition path would bring more benefits to countries than business as usual.
“The energy transition is far from being on track and anything short of radical action in the coming years will diminish, even eliminate chances to meet our climate goals,” says Francesco La Camera, director-general of IRENA. “Today, governments are facing multiple challenges of energy security, economic recovery, and the affordability of energy bills for households and businesses. The accelerated transition holds many answers. But it’s a political choice to put policies in place that comply with Paris Agreement and the Sustainable Development Agenda. Investing in new fossil fuel infrastructure will only lock-in uneconomic practices, perpetuate existing risks and increase the threats of climate change.”
Renewables would need to grow massively across all industries, from 14% of total electricity today to around 40% by 2030. As recommended by the Intergovernmental Panel on Climate Change, the global annual additions to renewable power would triple in 2030. In parallel, coal power must be replaced, fossil fuel assets phased-out, and infrastructure upgraded.
“It is high time to act,” La Camera adds. “Recent developments have clearly demonstrated that high fossil fuel prices can result in energy poverty and loss of industrial competitiveness. Eighty percent live in countries that import fossil fuels net. By contrast, renewables are available in all countries, offering a way out of import dependency and allowing countries to decouple economies from the costs of fossil fuels while driving economic growth and new jobs.”
The outlook for the energy transition sees efficiency and electrification as key drivers. This is enabled by renewables and hydrogen, and sustainable biomass. End-use carbonization will be at the forefront of the energy transition, with many options available through electrification green hydrogen and direct use renewables. Notably, electromobility is seen to be a driver of energy transition progress. This will allow for a 20-fold increase in global sales of electric vehicles (EV).
To achieve the required deployment levels by 2030, however, a comprehensive array of cross-cutting structural policies must be developed that covers all technological avenues and just transition goals. Increasing ambition in the National Determined Contributions (NDC) and national energy plans under the Glasgow Climate Pact must provide certainty and guide investment strategies in line with 1.5°C.
Particularly the world’s largest energy consumers and carbon emitters from the G20 and G7 must show leadership and implement ambitious plans and investments domestically and abroad. They would have to support the global supply 65% of renewables in power production by 2030. Climate finance, knowledge transfer and aid would have to increase in order to create an inclusive and equal world.
To enable a rapid transition that is compliant with climate and development goals, political commitment must be shown to support the highest levels of international cooperation. The outlook stresses that achieving sustainable development goals and universal access for modern energy by 2030 must be a key pillar of a just, inclusive energy transition. A global policy framework that is holistic can bring together countries to facilitate international finance, capacity, and technology flows.
Read IRENA’s World Energy Transitions Outlook 2022 here.