The world would need to add another 8.1 TW between 2022 and 2030

A new report indicates that achieving a key pledge made at the 28 meeting of the Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change will require a substantial financial commitment. According to the report, an average of USD2 trillion per year from 2024 through 2030 will be needed to triple global renewable power capacity and double the annual rate of energy efficiency improvements by 2030, as pledged by 124 countries at COP28. The report, released by Climate Analytics, a global climate science and policy institute, highlights that achieving the goal of tripling renewables to limit temperature rise to 1.5°C above preindustrial levels will necessitate USD 12 trillion of investment in the power system through 2030, translating to USD2 trillion annually. Of this investment, approximately 66 per cent (USD 8 trillion) should be directed towards the installation of renewables, with the remaining 34 Per cent (USD4 trillion) allocated to grid and storage infrastructure.

Analysis from various global pathways, including those outlined by the International Energy Agency and the Intergovernmental Panel on Climate Change, underscores the need to reach at least 11 terawatts (TW) of renewable capacity by 2030, a significant increase from the 3.4-3.6 TW capacity recorded in 2022. Despite the urgency of the situation, investments in renewables and grid expansion remain below the required levels. In 2023, the sector attracted only roughly USD1 trillion in investment. The report emphasizes the need for governments to take immediate action to bolster the renewables market, calling for international support to provide access to low-cost capital for emerging markets. Furthermore, the report highlights the disparity in support and investment in certain regions, particularly Sub-Saharan Africa, which faces a chronic lack of investment and international support. In these regions, renewable energy capacity needs to grow substantially to meet the targets set at COP28.

While tripling renewable capacity and doubling energy efficiency improvements by 2030 are significant steps towards reducing emissions and fossil fuel use, the report stresses the importance of continuing to increase renewable capacity to stay aligned with the 1.5°C pathway. Discussions surrounding the New Collective Quantified Goal on Climate Finance (NCQG) at COP28 have shown little progress, highlighting the urgent need for mobilizing investment in renewables and grid expansion, particularly in less wealthy countries. In addition to expanding renewable energy, the report calls for a phase-out of fossil fuels, with fossil fuel production and use needing to decrease by almost 40 Per cent by 2030 relative to 2020 to align with 1.5°C compatible pathways. Civil society groups have also called for a transition away from fossil fuels by 2030, with rich countries leading the way.