Renewables

IRENA: faster energy transitions could boost expected global growth

IRENA-growth-energy-transitions

Published

July 2, 2021

Country

Comments

0

Share

Published:

July 2, 2021

Country:

Comments:

0

Share

Speeding up energy transitions with a view to limiting global warming to 1.5°C by 2050 could increase global GDP by 2.4% within the next decade compared with current plans, or the Planned Energy Scenario (PES), according to the International Renewable Energy Agency (IRENA).

In its latest World Energy Transitions Outlook report, IRENA foresees up to 122 million energy-related jobs in 2050, more than double today’s 58 million, with the renewables sector alone accounting for more than a third of all energy jobs, or 43 million. Solar photovoltaic (PV) will account for the largest share of the jobs, followed by bioenergy, wind, and hydropower.

IRENA-jobs-2050

The needed investment is high but feasible, with benefits greatly exceeding the costs

The necessary annual investment in IRENA’s 1.5°C scenario is estimated at USD 4.4 trillion, which it says is high but feasible, equaling about 5% of global GDP in 2019. By 2050, a total of USD 33 trillion of additional investment is required in areas such as energy efficiency, renewables, power grids, hydrogen, and innovations, but the benefits will greatly exceed the costs, according to IRENA.

Every dollar spent on the energy transition will add benefits of between USD 2 and USD 5.5, which translates into between USD 61 trillion and USD 164 trillion in cumulative terms by the mid-century.

IRENA-invetsment

The payback is even higher when the impact on air pollution, human health and climate change is factored in, according to IRENA.

Energy transition technologies will find it easier to obtain affordable long-term loans

The 1.5°C pathway will require, among other things, phasing out coal and limiting investments in oil and gas. IRENA predicts that energy transition technologies will find it easier to obtain affordable long-term debt financing in the coming years, while fossil fuel assets will increasingly be avoided by private financiers and forced to rely on equity financing from retained earnings and new equity issues.

However, public financing will remain crucial, ensuring a swift, just, and inclusive energy transition and facilitating private finance, IRENA said, adding that its 1.5°C scenario envisages almost doubling such investments from USD 450 billion in 2019 to about USD 780 billion.

Government should scrap policies that favor fossil fuels, including subsidies

IRENA also calls on policy makers to eliminate market distortions that favor fossil fuels, including phasing out fossil fuel subsidies and changing fiscal systems to reflect the negative environmental, health, and social costs of fossil fuels.

International cooperation is an essential piece of the global energy transition

IRENA also called for enhanced international cooperation, which it believes is an essential piece of the global energy transition. A holistic global policy framework is needed to bring countries together to commit to a just transition that leaves no one behind and strengthens the international flow of finance, capacity and technologies, reads the report.

Comments (0)

Be the first one to comment on this article.

Enter Your Comment
Please wait... Please fill in the required fields. There seems to be an error, please refresh the page and try again. Your comment has been sent.

Related Articles

Vienna airport Austria biggest solar power plant

Vienna airport completes Austria’s biggest solar power plant

23 May 2022 - Flughafen Wien Group said it has put Austria's biggest solar power plant into operation on 24 hectares at the Vienna International Airport

Serbian power utility kicks- off construction of its first wind power plant Kostolac

20 May 2022 - EPS signed the loan agreement in November 2017, and received an energy permit for the wind farm at the end of 2018

Kosovo to launch auctions for 100 MW of solar

Kosovo* plans to launch auction for 100 MW of solar

20 May 2022 - Auctions are divided in smaller portions because the intention is to encourage local investors, not only those from abroad

Industry draws first global definition of green hydrogen

Industry draws up first global definition of green hydrogen

19 May 2022 - The Green Hydrogen Organization (GH2) has published a Green Hydrogen Standard - for certification and labeling, and greenwashing prevention