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Innovation Paves Way for Next Stage of Global Energy Transformation

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Countries at the forefront of the energy transformation are getting more than a third of their energy from variable renewables like solar and wind, and they’re doing it in a cost-effective manner. By making use of innovative solutions that allow to integrate a higher share of renewables into power systems, innovation holds the key to a cost-effective global energy transformation.

These findings come from a first-of-a-kind mapping and analysis of innovations that will transform the power sector, launched by the International Renewable Energy Agency (IRENA) today in Brussels. IRENA’s Director-General Adnan Z. Amin presented the report in the presence of EU Energy and Climate Action Commissioner Miguel Arias Cañete at an official launch event hosted by the European Commission. The report “Innovation Landscape for a Renewable-Powered Future: Solutions to integrate variable renewables” contains the most in-depth assessment of the power sector transformation to date. It shows how synergies between different innovative solutions in business models, market design, enabling technologies and system operation are lowering the cost of integrating high shares of variable renewable energy (VRE), while making energy production, transmission and consumption more flexible and empowering a new generation of energy consumers.

Decarbonising the global power sector in line with the Paris Agreement objectives will require an 85% share of renewable energy in total electricity generation by 2050, IRENA’s 2050 Roadmap estimates. By then, variable renewables would account for 60% of the total power generated globally. Moving to a new phase where the massive but cost-effective scale-up of renewables power is crucial, the power sector transformation is strongly accelerated by innovation trends in digitalization, decentralization and electrification of the end-use sectors. Understanding and learning from the experiences from leading countries in VRE integration is crucial to replicate and enhance innovation that can accelerate this transformation.

With close to 15% of VRE share in annual electricity generation today, the EU has the highest levels of variable renewables in power systems globally. “Europe has shown tremendous leadership in initiating the system-wide innovations needed to support the widespread adoption of renewables and decarbonise the global economy”, said IRENA Director-General Adnan Z. Amin. “The region’s success shows us that innovation is creating an energy transformation that is technically feasible and economically attractive. Innovation is the engine powering the energy transition and the global pace of innovation is accelerating. IRENA’s new report will provide a clear, navigable and comprehensive guide on innovations being piloted around the world, aiming to support informed decision-making by all countries to deploy low-cost renewables and accelerate the global energy transition further.”

EU Commissioner for Energy and Climate Action Miguel Arias Cañete reiterated the importance of renewable energy in helping the region to meet its climate objectives, “The EU has already started the modernisation and transformation towards a climate neutral economy. Implementing the EU’s Clean Energy package will further boost innovation, and the EU can continue to show leadership and support the rest of the world by exporting innovative solutions in the fight against climate change. Innovation is central to our efforts, and this report from IRENA is a valuable contribution to become the world’s first major economy to go climate neutral by 2050.”

The new report identifies 30 key innovations and 11 innovative solutions in development by pioneering companies and backed by far-sighted governments around the world. By showcasing many examples of projects and pilots for the power sector transformation across the globe, it supports policy makers in adopting innovation frameworks built on the combination and synergies between innovative solutions. As a unique toolbox it will help decision makers to rethink their power systems and implement solutions that account for specific national circumstances.

Key Findings from the report:

  • Innovation accelerates a cost-effective global energy transformation.
  • Flexible power systems maximize benefits of the energy transformation. Innovation in power systems minimizes costs related to the acceleration of renewable energy.
  • There are abundant innovative solutions to integrate VRE in power systems. However, policy-makers must adopt an innovation framework based on a systematic approach that creates synergies between innovations in technology, business models, market design and system operation, resulting in flexibility solutions to ensure a cost-effective integration of VRE at large scale.
  • Power sector innovation trends i.e. digitalization, electrification and decentralization are ongoing trends that can further accelerate the power sector transformation.
  • IRENA assessed 30 innovation types, clustered in four dimensions: enabling technology (e.g. batteries, EV, blockchain), business model (e.g. energy-as-a-service, aggregators), market design (e.g. time-of-use tariffs) and system operation (e.g. empowerment of DSO) in the report.
  • IRENA estimates that if some flexibility options are implemented, investments necessary for the integration of a high share of VRE may sum up to 18 trillionUSD from today to 2050 – corresponding to the total investments required in additional renewable energy generation technologies.
  • EU28 has been leading in VRE integration, with close to 15% of VRE share in annual electricity generation today, expected to increase to almost 50% by 2050. The three largest power systems in the world – China, India and the United States are expected to double their share of VRE to more than 10% of annual generation by 2022.

IRENA

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African fisheries need reforms to boost resilience after Covid-19

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The African fisheries sector could benefit substantially from proper infrastructure and support services, which are generally lacking. The sector currently grapples with fragile value chains and marketing, weak management institutions and serious issues relating to the governance of fisheries resources.

These were the findings of a study that the African Natural Resources Centre conducted from March to May 2020. The centre is a non-lending department of the African Development Bank. The study focused on the impact of the Covid-19 pandemic in four countries – Morocco, Mauritania, Senegal and Seychelles. The countries’ economies depend heavily on marine fisheries. The fisheries sector is also a very large source of economic activity elsewhere in Africa. It provides millions of jobs all over the continent.

The study dwells on appropriate and timely measures that the four countries have taken to avoid severe supply disruptions, save thousands of jobs and maintain governance transparency amid the ongoing global uncertainty and crisis.

Infrastructure shortcomings include landing facilities, storage and processing capacity, social and sanitary equipment, water and power, ice production, and roads to access markets.

Based on the findings, researchers made recommendations to strengthen the resilience of Africa’s fisheries sector in the context of a prolonged crisis, and looking ahead to a post-Covid-19 recovery.

The report strongly advocates for:

– Increased acknowledgment of the essential role of marine fisheries stakeholders and the right of artisanal fishermen to access financial and material resources.

– Strengthening the collection of gender-disaggregated statistical data in a sector that employs a vast number of women and youth.

– Establishing infrastructure and support services at landing and processing sites of fishery products, with priority access to water.

– Investing in human capital to ensure high-level skills in the different areas of fisheries management.

– Improving governance frameworks by encouraging the private sector and civil society to participate in formulating sectoral policies and resource management measures.

The study recommends urgent reforms to make marine fisheries more resilient and enable the sector to contribute sustainably to the wealth of the continent’s coastal countries.

Marine fisheries are a crucial contributor to food security and quality of life in Africa. Good nutrition is a key factor to quality of life, and the marine fisheries sector supports the nutrition of more than 300 million people, the majority of whom are children, youth and women. It also provides more than 10 million direct and indirect jobs.

Dominated by artisanal fishing and traditional value chains, the fisheries sector in Africa is mainly informal and is rarely considered in public policies or in assessing the wealth of countries.

Like other sectors, the African fisheries sector has been severely hit by the Covid-19 pandemic. Covid has affected supply markets and regional trade. This has resulted in substantial economic losses for most households that depend on fisheries.

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Top Trends Impacting Global Economy, Society and Technology

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The new technologies of the Fourth Industrial Revolution, such as artificial intelligence (AI), the cloud and robotics, are changing the way we live, learn and do business at a rate unprecedented in human history. This seismic shift is playing out in a world characterized by unreliable political landscapes and increasing environmental instability.

Scenario planning in this environment can be very difficult for businesses, affecting their ability to plan for the future, and properly assess the risks and opportunities that may present themselves. The Technology Futures report, released in collaboration with Deloitte, provides leaders with data analysis tools to scenario plan and forecast future technology trends.

“The rapid pace of technological change, alongside the global crisis caused by COVID-19, means that leaders today need new tools to understand challenges and develop strategies in the face of an increasingly uncertain future. This report provides three new analytical tools for business leaders to think about the future in a dynamic environment,” said Ruth Hickin, Strategy and Impact Lead, Centre for the Fourth Industrial Revolution, World Economic Forum.

“We are delighted to collaborate with the World Economic Forum to take a disciplined look into the future, particularly as we emerge from a world-altering event, like COVID-19,” said Mike Bechtel, Managing Director and Chief Futurist, US Consulting, Deloitte, and lead author of the report. “We hope that by providing a clearer picture of how today’s nascent technologies will impact our future, we can play a meaningful part in driving innovation, collaboration and economic growth that improves life for all people.”

The report breaks down future trends into four categories for business leaders and provides some examples of what is likely to remain constant in the years ahead.

  • Information: With the volume of accessible data exploding and more of our personal lives lived online, the report projects the probable implications for remote learning, remote working and healthcare.
  • Locality: Since the onset of COVID-19, even more of our interpersonal interaction is virtual and physical experiences have dwindled. The report projects more niche, readily available virtual experiences available to consumers.
  • Economy: The report forecasts a growing likelihood that flexible and clean energy production will continue rising.
  • Education: Personalized education will likely grow, along with the availability of digitized and virtualized content.

In addition to strategic modelling, the report gives leaders a baseline history of how the Fourth Industrial Revolution has progressed. It highlights just how fast technology is evolving and outlines one way risk management could evolve to better address and adapt to it.

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South Asian Economies Bounce Back but Face Fragile Recovery

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Prospects of an economic rebound in South Asia are firming up as growth is set to increase by 7.2 percent in 2021 and 4.4 percent in 2022, climbing from historic lows in 2020 and putting the region on a path to recovery. But growth is uneven and economic activity well below pre-COVID-19 estimates, as many businesses need to make up for lost revenue and millions of workers, most of them in the informal sector, still reel from job losses, falling incomes, worsening inequalities, and human capital deficits, says the World Bank in its twice-a-year regional update. 

Released today, the latest South Asia Economic Focus: South Asia Vaccinates shows that the region is set to regain its historical growth rate by 2022. Electricity consumption and mobility data is a clear indication of recovering economic activity. India, which comprises the bulk of the region’s economy, is expected to grow more than 10 percent in the fiscal year 2021-22—a substantial upward revision of 4.7 percentage points from January 2021 forecasts. 

The outlook for Bangladesh, Nepal, and Pakistan has also been revised upward, supported by better than expected remittance inflows: Bangladesh’s gross domestic product (GDP) is expected to increase by 3.6 percent in 2021; Nepal’s GDP is projected to grow by 2.7 percent in the fiscal year 2021-22 and recover to 5.1 percent by 2023; Pakistan’s growth is expected to reach 1.3 percent in 2021, slightly above previous projections. 

The improved economic outlook reflects South Asian countries’ efforts to keep their COVID-19 caseload under control and swiftly roll out vaccine campaigns. Governments’ decisions to transition from widespread lockdowns to more targeted interventions, accommodating monetary policies and fiscal stimuli—through targeted cash transfers and employment compensation programs—have also propped up recovery, the report notes. 

“We are encouraged to see clear signs of an economic rebound in South Asia, but the pandemic is not yet under control and the recovery remains fragile, calling for vigilance,” said Hartwig Schafer, World Bank Vice President for the South Asia Region. “Going forward, South Asian countries need to ramp up their vaccination programs and invest their scarce resources wisely to set a foundation for a more inclusive and resilient future.” 

While laying bare South Asia’s deep-seated inequalities and vulnerabilities, the pandemic provides an opportunity to chart a path toward a more equitable and robust recovery. To that end, the report recommends that governments develop universal social insurance to protect informal workers, increase regional cooperation, and lift customs restrictions on key staples to prevent sudden spikes in food prices. 

South Asia, which grapples with high stunting rates among children and accounts for more than half of the world’s student dropouts due to COVID-19, needs to ramp up investments in human capital to help new generations grow up healthy and become productive workers. Noting that South Asia’s public spending on healthcare is the lowest in the world, the report also suggests that countries further invest in preventive care, finance health research, and scale up their health infrastructure, including for mass and quick production of vaccines. 

“The health and economic benefits from vaccinations greatly exceed the costs involved in purchasing and distributing vaccines for all South Asian countries,” said Hans Timmer, World Bank Chief Economist for the South Asia Region. “South Asia has stepped up to vaccinate its people, but its healthcare capacity is limited as the region only spends 2 percent of its GDP on healthcare, lagging any other region. The main challenge ahead is to reprioritize limited resources and mobilize more revenue to reach the entire population and achieve full recovery.”

The World Bank, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries respond to the health, social and economic impacts of COVID-19. This includes $12 billion to help low- and middle-income countries purchase and distribute COVID-19 vaccines, tests, and treatments, and strengthen vaccination systems. The financing builds on the broader World Bank Group COVID-19 response, which is helping more than 100 countries strengthen health systems, support the poorest households, and create supportive conditions to maintain livelihoods and jobs for those hit hardest.

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