Renewable energy investments are a win-win scenario, says IRENA chief
The Paris climate change agreement adopted at the end of 2015 has put renewable energy at the heart of the global energy system with investments expected to grow strongly amidst the decline in fossil fuels. A report entitled Renewable Energy Benefits: Measuring the Economics has shown that increasing the world's share of renewable energy would boost global GDP by up to US$1.3 trillion and increase social welfare and employment. The report released today at the International Renewable Energy Agency (IRENA) assembly in Abu Dhabi, UAE, the first major multilateral meeting since the UN Climate Chance Conference in Paris (COP21), provides a global estimate of the macroeconomic impacts of renewable energy deployment. Specifically, it outlines the benefits that would be achieved under the scenario of doubling the global share of renewable energy by 2030 from 2010 levels. According to the report employment in the renewable energy sector would increase from 9.2 million global jobs today, to more than 24 million by 2030. “Mitigating climate change through the deployment of renewable energy and achieving other socio-economic targets is no longer an either-or equation,” said Adnan Amin, Director General of IRENA. “Thanks to the growing business case for renewable energy, an investment in one is an investment in both. That is the definition of a win-win scenario.” The IRENA Assembly, the first international event to take place after the climate talks in Paris, has attracted governments, the private sector and parliamentarians to elaborate on how they plan to achieve their emission reduction targets, in part through renewable energy. “The Paris COP21 was an extraordinary political success,” said Amin. “Global leaders committed themselves to a target of below two degrees Celsius temperature increase, with even greater ambition of 1.5 degrees Celsius target. This will have far reaching implications for our future.” He said with the agreement in place, there is a need for international cooperation at this time with unprecedented focus on renewable energy. “Renewable energy is soaring, growing far more quickly than many predicted, and mainstream projections for its future envisage a profound impact on the global energy mix,” he said. “Renewables today constitute 30 percent of all installed power capacity, the largest share of any source.” Studies by IRENA indicate that in the last five years installed solar power increased seven-fold, while wind power capacity more than doubled. Global investment flows into renewables have increased six-fold in the last decade. Early estimates indicate that 2015 witnessed continued growth with over US$280 billion invested in the sector worldwide with developing countries accounting for half of this investment. European Union Commissioner for Climate Action and Energy, Miguel Arias Cañete, in a presentation at a Ministerial Roundtable on ‘Concerted action towards Renewable Energy Deployment’ said the Paris Agreement was more ambitious than many had expected. “I was delighted that in Paris, Europe threw its weight behind the Africa Renewable Energy Initiative to increase access to clean energy and reduce energy poverty in a region in which 600 million people still have no access to electricity,” he said. He said the Paris agreement was timely given the emerging evidence that renewables have been proven to reduce emissions. “In one year alone, renewable energy helped to reduce Europe’s emissions by the equivalent of Spain’s annual emissions,” he added. “But just like the rest of the world, we now have to step up our efforts to make sure we meet our renewables commitments. For the European Union that means a minimum 27 percent share of renewables in our energy system by 2030.” Dr Rabia Ferroukhi, the Deputy Director of Knowledge Policy at IRENA, said the deployment of renewable energy technologies and investments is likely to increase given that almost half of the 185 Intended Nationally Determined Contributions (INDCs) submitted before the Paris COP21 had explicit energy targets mainly targeting increased deployment of renewables. She said there has been a declining price trend in the cost of solar and wind, saying it will be another factor to drive renewables in economies. According to Dr Ferroukhi, renewable energy investments in India and China have also been increasing despite the fall in fossil fuel prices. The price of Brent crude has plunged 67 percent from US$112.36 to US$37.28 per barrel. A report by Bloomberg New Energy Finance, tracking clean energy investment globally for more than 10 years, found that renewables had attracted a record US$329 billion in global investment in 2015 up 4 percent from 2014’s revised US$315.9 billion and beating the previous record, set in 2011, by 3 percent. The report said 2015 was also the highest ever for installation of renewable power capacity, with 64GW of wind and 57GW of solar PV commissioned during the year, an increase of nearly 30 percent over 2014. It had been predicted that the fall of oil and gas prices would undermine investment in renewables, electric vehicles, and other clean technologies but Michael Liebreich, Chairman of the Advisory Board for Bloomberg New Energy Finance, said the figures are a stunning riposte to all those who expected clean energy investment to stall with falling oil and gas prices. Liebreich says that more investments from both private and public sectors are needed in order to push clean energies further especially in areas where over a billion people don’t have access to electricity. “This is beyond pump priming monies now, this is large scale financing,” said Liebreich. “A third of a trillion dollars per year that needs to grow to half a trillion and beyond is going to require a full spectrum of tools both in the destination countries and in the funding countries and throughout the capital markets.” Paul Simons, Deputy Executive Director of the International Energy Agency (IEA) said that renewable energy technologies were no longer viewed as expensive options reserved for the rich. “There is the same underlying energy diversification desires by our member states as there is desire for decarbonisation,” said Simons. “So we don’t think long term oil prices will be a major break on renewables growth. However there is a need to reinforce policy consistency.”
By Wambi Michael
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Photo: IRENA