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Staying on Course: Renewable Energy in the Time of COVID-19

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Francesco La Camera, IRENA Director-General, image: IRENA

Statement by Francesco La Camera, IRENA Director-General 

In a short few weeks, much of the world has been shut down due to the novel coronavirus, COVID-19, which has crossed borders and oceans, rapidly devastating communities and livelihoods.

Decisions being taken now to address the social and economic impacts of the crisis come amid profound uncertainty about both the course of the pandemic and its long-term ramifications for societies across the world. The immediate priority remains to save as many lives as possible, bring the health emergency under control and alleviate hardship. At the same time, governments are embarking on the monumental task of devising stimulus and recovery packages. These are at a scale to shape societies and economies for years to come.

This response must align with medium- and long-term priorities. The goals set out in the United Nations 2030 Agenda and the Paris Agreement can serve as a compass to stay on course during this disorienting period. They can help to ensure that the short-term solutions adopted in the face of COVID-19 are in line with medium- and long-term development and climate objectives.

Stimulus and recovery packages can also accelerate the shift to sustainable, decarbonised economies and resilient inclusive societies. A coherent design approach is needed to secure political buy-in, business support and social acceptance. As the current crisis makes clear, we can no longer afford to make policy decisions and investments in isolation amid elaborately intertwined social, economic and environmental challenges.

The fundamentally economic, more than financial, nature of this crisis calls for a major state role in the response. This involves defining the strategies and initiating direct interventions for the way out. Expansionary budget policies may be envisaged to support this effort.

Stimulus and recovery measures in response to the pandemic must foster economic development and job creation, promote social equity and welfare, and put the world on a climate-safe path. By making the energy transition an integral part of the wider recovery, governments can achieve a step change in the pursuit of a healthy, inclusive, prosperous, just and resilient future.

Energy transitions are already underway in many countries. These transitions have become increasingly affordable because of forward-looking policy frameworks, ongoing innovations and falling technology costs for renewables. Solar photovoltaic (PV) and wind power have become the cheapest sources of electricity in many markets, with other renewable power sources poised to reach cost parity within a few years. In the power sector, renewables have dominated new capacity additions and increasingly outpaced fossil fuels for the past seven years. Last year alone, renewables accounted for nearly three quarters of global power capacity additions.

The economic fallout from the pandemic is far-reaching, with an adverse impact on many sectors including renewables. For many reasons, however, the impact may be different than in other economic sectors. Governments can turn to a renewables-based energy transition to bring a range of solutions at this difficult moment. Many renewable technologies can be ramped up relatively quickly, helping to revive industries and create new jobs.

Decentralised solutions tend to be comparatively labour-intensive. Adopting renewables can therefore create employment and boost local income in both developed and developing energy markets. Employment in the sector, which reached 11 million jobs worldwide in 2018, could quadruple by 2050, while jobs in energy efficiency and system flexibility could grow by another 40 million.

Decentralised technologies also allow for greater involvement by citizens and communities in energy decisions, with transformative social implications. Importantly, they offer a proven approach for remote health care in energy-poor communities and add a key element to the crisis response toolkit.

In the creation of future infrastructure, energy solutions aimed at scaling up renewables provide a safe and visionary strategic investment choice. Recovery measures could help to install flexible power grids, efficiency solutions, electric vehicle (EV) charging systems, energy storage, interconnected hydropower, green hydrogen and multiple other clean energy technologies. With the need for energy decarbonisation unchanged, such investments safeguard against short-sighted decisions and increased accumulation of stranded assets.

The latest oil price developments and the heightened unpredictability of returns on hydrocarbon investments make the business case for renewables even stronger. Current market dynamics could further weaken the viability of unconventional oil and gas resources and long-term contracts. The moment has come to reduce or redirect fossil-fuel subsidies towards clean energy without added social disruption.

Research and innovation are vital to keep improving the technologies and reduce the costs for sustainable energy. This is especially true in end-use sectors like transport, heating and cooling, as well as for enabling technologies such as energy storage and green hydrogen. Governments must embrace these forward-looking options to ensure that public policies and investment decisions reflect the true potential for low-carbon economic development.

These should be major considerations as policy makers put together recovery measures. A purely market-driven approach will not be adequate, either to respond to the immediate crisis or to mobilise longer-term investments. Governments will have to consider innovative approaches to secure financing at the required scale and speed. Clear long-term objectives, combined with targeted public investment and appropriate market incentives, will also enable the private sector to act swiftly and confidently.

While the current crisis has undoubtedly underlined global interconnections and strengthened the vision of a more resilient society at national and regional levels, it has also highlighted the vast differences in countries’ circumstances and capacities. International co-operation is needed to tackle deeply embedded shortfalls and vulnerabilities, and crisis responses must reflect global co-dependency. Investments must be directed everywhere they are needed, including to the most vulnerable countries and communities.

This year was meant to be a turning point for climate and sustainable development, with 2020 marking the start of the decade of action. The unexpected pandemic, with its devastating consequences for communities and economies is upending plans, interrupting trends and testing assumptions. We are yet to see the contours of the post-COVID world.

The mounting loss of life is devastating, and the strain on communities and economies will require thoughtful and far-reaching strategies. A wider perspective is needed, viewing energy, society, economy and the environment as parts of a unique, holistic system.

The response must provide more than just a bail-out for existing socio-economic structures. Now, more than ever, public policies and investment decisions must align with the vision of a sustainable and just future. Such undertakings are certainly ambitious. But they are entirely achievable with a collective, co-ordinated response.

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IRENA Outlines Action Agenda on Offshore Renewables for G20

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Boosting offshore renewables will accelerate the energy transition and allow G20 countries to build a resilient and sustainable energy system, a new report by the International Renewable Energy Agency (IRENA) finds. Offshore Renewables: An Action Agenda for Deployment actively contributes to the G20 agenda by identifying actions which support the commercialisation of offshore technologies such as wind, wave, tidal, ocean thermal and floating PV in pursuit of extending their deployment worldwide. The report was launched by IRENA’s Director-General Francesco La Camera during the meeting of G20 Environment, Climate and Energy Ministers in Naples.

“Offshore renewables have the potential to meet more than twenty times of today’s global power demand”, said Francesco La Camera, Director-General of IRENA. “Particularly offshore renewables constitute a critical pillar for decarbonising energy systems and fostering a global blue economy. I congratulate the G20 Presidency for their forward-looking decision to integrate offshore renewables in the G20 agenda. IRENA is pleased to support the G20 Offshore Renewables Action Agenda with our energy transition expertise and valuable input from our global membership.”

To put the world on a climate-safe pathway, IRENA’s 1.5°C scenario foresees a massive growth of offshore wind,  ocean energy and floating photovoltaic in the coming decades. Offshore wind for example would increase from 34 gigawatts (GW) today to 380 GW by 2030 and more than 2,000 GW by 2050. Ocean energy would represent additional 350 GW of offshore renewable generation capacity by 2050.

Today’s report includes 50 concrete actions that G20 countries could take while defining their national strategies for offshore renewables. Suggested actions include the strengthening of oceans governance in line with UN Law of the Sea, the integration of offshore renewables in national marine spatial planning and early planning for infrastructure like underwater cables and grids. Policy frameworks, international cooperation and investment in R&D are key recommendations to drive offshore globally. The report recommends to promote financing for offshore within the “Finance Track” of the G20.

Offshore renewables have the potential to greatly contribute to SDG 14 on the sustainably use of oceans while boosting blue economy activities such fishery, shipping and tourism. A blue economy fuelled by offshore renewables would help islands and countries with coastal areas to meet their national goals aligned with the Paris Agreement and 2030 Sustainable Development Agenda.

The G20 is well placed to foster offshore renewables. Members account for the vast majority of global economic activity and trade and are home to over three-quarters of total offshore renewable installed capacity to date. 99.3% of total offshore wind capacity and nearly all installed ocean energy capacity globally can be found in G20 countries.

Today’s report was prepared by IRENA on the request and to the Italian Presidency of the G20. It benefited from the input of the G20 Working Group on Energy and insights by IRENA’s global membership gained under the Agency’s Collaborative Framework on Offshore Renewables.

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Empowering “Smart Cities” toward net zero emissions

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The world’s cities can play a central role to accelerate progress towards clean, low-carbon, resilient and inclusive energy systems. This idea is recognized by climate and energy ministers from G20 nations who will meet under the presidency of Italy in Naples to focus on steps that national governments can take to support urban areas to deploy solutions and technologies to reduce emissions.

New technologies and increased connectivity, as well as the sheer scale of the world’s metropolises, are opening up massive opportunities to optimise urban planning, improve services and extend access, while at the same time creating revenue streams, jobs and business ventures. In this context, the International Energy Agency developed a report at the request of the Italian G20 presidency to showcase the opportunities and challenges facing cities, and the actions that can be taken to support progress.

The IEA’s Empowering Cities for a Net Zero Future builds on extensive consultations with over 125 leading experts and organisations, and presents case studies from 100 cities in 40 countries. The examples illustrate the wide range of opportunities and solutions that can help city-level authorities make full use of efficient and smart energy systems.

At the same time, urban agglomerations are incubators for cutting-edge technologies, and their density and size offer economies of scale that can cut the cost of infrastructure and innovation. This mix of factors puts cities at the leading edge to come up with creative solutions to climate and energy challenges.

And with growing urbanisation trends, the central role of cities will keep increasing. Cities today account for more than 50% of the planet’s population, 80% of its economic output, two-thirds of global energy consumption and more than 70% of annual global carbon emissions. By 2050, more than 70% of the world’s population will live in cities, resulting in a massive demand growth for urban energy infrastructure.

From smart streetlamps to self-cooling buildings to smart electric car chargers, investing in city-level action can provide the biggest carbon-mitigation return on investment and accelerate inclusive clean energy transitions.

The new report contains a set of high-level recommendations to accelerate energy transitions and leverage the full potential of cities to reduce emissions thanks to digitalisation.

By 2024, an anticipated 83 billion connected devices and sensors will be creating large, diverse datasets on a wide range of topics, such as energy consumption, air quality, and traffic patterns. Next-generation energy systems can leverage the data from these connected buildings, appliances and transportation systems to reduce energy consumption, improve grid stability and better manage city services. 

For example, digital simulations can show how different designs, technologies and equipment affect energy demand pathways and associated costs. The LA100 study, conducted by the U.S. National Renewable Energy Laboratory, points the way towards achieving a 100% renewables-supplied city by 2045. The study simulates thousands of buildings, using aerial scans, customer adoption models as well as utility planning tools to ensure power system stability, and estimates that these measures would avoid between USD 472 million and USD 1.55 billion in distribution network investments.

The electricity consumed in street lighting globally is equivalent to Germany’s total annual electricity consumption, and can constitute up to 65% of municipal electricity budgets. Yet only 3% of the globe’s 320 million street lighting poles are smart enabled, even though smart street lighting can reduce electricity use by up to 80% by adjusting output based on ambient light levels and weather. Smart street lamps can also monitor traffic, pedestrian crossings, and noise and air pollution, as well as incorporate electric car chargers and cell phone infrastructure.

India, under its National Streetlighting Programme, has reduced peak energy demand by more than 1000 MW thanks to 10 million smart LED streetlights. Digitalisation can also help improve maintenance. In Italy, an app developed by Enel X allows citizens to report street lighting faults using their smartphones.

To reduce congestion and greenhouse gas emissions, Jakarta’s Smart City initiative integrated public transport management and payment systems to help plan a more reliable, safe and affordable rapid bus transit system. Under PT JakLingko Indonesia, this comprehensive integration process increased the number of Transjakarta commuters from about 400 000 per day in December 2017 to just over 1 million per day in February 2020.

Vancouver, Canada, now requires every residential parking space in new developments to feature electricity outlets to charge electric vehicles. Meanwhile, digitalisation can shift around 60% of the generation capacity needed to charge these vehicles away from peak demand times. Smart traffic management systems can reduce congestion by 8%.

As economies recover from the Covid-19 pandemic, CO2 emissions are rebounding rapidly. The increase in global energy-related CO2 in 2021 could be the second largest in recorded history. Cities are the globe’s economic engine, and the solutions they seek can transform the energy landscape by creating new synergies to reduce emissions, improve energy efficiency, enhance resilience and provide a cleaner prosperous future for us all. Strong international cooperation and collaboration can play a crucial role in this, notably through emerging knowledge-sharing networks that span cities and countries. 

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Global emissions are set to surge to an all-time high

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Governments worldwide are deploying an unprecedented amount of fiscal support aimed at stabilising and rebuilding their economies, but only about 2% of this spending has been allocated to clean energy measures, according to new analysis from the International Energy Agency.

The sums of money, both public and private, being mobilised worldwide by recovery plans fall well short of what is needed to reach international climate goals. These shortfalls are particularly pronounced in emerging and developing economies, many of which face particular financing challenges.

Under governments’ current recovery spending plans, global carbon dioxide (CO2) emissions are set to climb to record levels in 2023 and continue rising in the following years. This would leave the world far from the pathway to net-zero emissions by 2050 that the IEA set out in its recent Global Roadmap to Net Zero.

These findings come from the new Sustainable Recovery Tracker that the IEA launched today to help policy makers assess how far recovery plans are moving the needle on climate. The new online tool is a contribution to the G20 Ministerial Meeting on Environment, Climate and Energy in Naples, which takes place on 22 and 23 July under the Presidency of Italy.

The Tracker monitors government spending allocated to sustainable recoveries and then estimates how much this spending boosts overall clean energy investment and to what degree this affects the trajectory of global CO2 emissions. The Tracker considers over 800 national sustainable recovery policies in its analysis, which are publicly available on the IEA website.

“Since the Covid-19 crisis erupted, many governments may have talked about the importance of building back better for a cleaner future, but many of them are yet to put their money where their mouth is. Despite increased climate ambitions, the amount of economic recovery funds being spent on clean energy is just a small sliver of the total,” said Fatih Birol, the IEA Executive Director.

Governments have mobilised USD 16 trillion in fiscal support throughout the Covid-19 pandemic, most of it focused on emergency financial relief for households and firms. Only 2% of the total is earmarked for clean energy transitions.

In the early phases of the pandemic, the IEA released the Sustainable Recovery Plan, which recommended USD 1 trillion of spending globally on clean energy measures that could feature prominently in recovery plans. According to the Plan – developed in collaboration with the International Monetary Fund – this spending would boost global economic growth, create millions of jobs and put the world on track to meet the Paris Agreement goals.

According to the Tracker, all the key sectors highlighted in the IEA Sustainable Recovery Plan are receiving inadequate attention from policy makers. Current government plans would only increase total public and private spending on clean energy to around USD 350 billion a year by 2023 – only 35% of what is envisaged in the Plan.

The Tracker shows the stark geographic disparities that are emerging in clean energy investment. The majority of funds are being mobilised in advanced economies, which are nearing 60% of the investment levels envisaged in the Sustainable Recovery Plan. Emerging and developing economies, many of which have limited fiscal leeway, have so far mobilised only about 20% of the recommended spending levels.

“Not only is clean energy investment still far from what’s needed to put the world on a path to reaching net-zero emissions by mid-century, it’s not even enough to prevent global emissions from surging to a new record. Many countries – especially those where the needs are greatest – are also missing the benefits that well planned clean energy investment brings, such as stronger economic growth, new jobs and the development of the energy industries of the future,” Dr Birol said

“Governments need to increase spending and policy action rapidly to meet the commitments they made in Paris in 2015 – including the vital provision of financing by advanced economies to the developed world,” Dr Birol added. “But they must then go even further by leading clean energy investment and deployment to much greater heights beyond the recovery period in order to shift the world onto a pathway to net-zero emissions by 2050, which is narrow but still achievable – if we act now.”

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