(Bloomberg) -- The increasingly rapid deployment of renewables around the world is still not enough to meet global goals, according to a group of political and climate leaders speaking Tuesday at the Global Renewables Summit in New York.
Securing more private investments remains key to tripling global renewable energy capacity by 2030, a goal set by the consensus of nearly 200 countries at last year’s UN climate summit in Dubai. “It was one of the rare moments when the world was united as one,” said European Commission President Ursula von der Leyen, in her remarks on Tuesday. She called on leaders to “start aligning financial flows with the Paris Agreement.”
The world will likely reach 10.3 terawatts of renewables capacity by the end of the decade, according to a new report from BloombergNEF released ahead of today’s event, falling slightly behind the 11 terawatts goal adopted at COP28. Analysts from the energy-research group expect the falling cost of solar panels, wind turbines and lithium-ion batteries will encourage governments to adopt policies to increase the pace of deployment of clean energy. The total investment needed to reach the 2030 goal would be about $1 trillion per year, the report found.
Mia Mottley, prime minister of Barbados and a proponent of increasing climate finance for developing nations, emphasized that the global effort to triple renewable capacity will not happen without most of the money coming from private investors. “If we are serious about reaching our 2030 goals, we have to be practical,” she said Tuesday, at the event held on the sidelines of the United Nations General Assembly and shortly before the Bloomberg Global Business Summit.
Mottley has been the driving force behind the Bridgetown Agenda, which has set out a series of steps that can help rapidly increase the financial resources available for climate solutions. She told the audience at the Plaza Hotel that she will launch a third edition of the climate-finance agenda in “the coming days.”
One of the biggest private funds launched in the past year is Alterra. Introduced in Dubai during COP28 and led by the United Arab Emirates government, the fund aims to deploy $30 billion toward clean energy. COP28 President Sultan Al Jaber, speaking at Tuesday’s summit, said the fund has already deployed $6.4 billion targeting 40 gigawatts of renewables in developed and developing countries. “The trends are moving the right direction, just not fast enough and not at the right scale,” he said.
His successor, COP29 President Mukhtar Babayev of Azerbaijan, recounted a number of non-negotiated outcomes that he hopes country delegates will agree to. Those include a target to increase the capacity of energy storage six-fold, reaching 1,500 gigawatts by 2030. “The energy transition is a vital step for sustainable development,” Babayev said.
While last year saw record growth of global deployment of renewable energy, the International Energy Agency said the world will probably fall short of its tripling goal if countries don’t improve or introduce policies to support a faster rollout of solar and wind energy. This could mean taking steps such as addressing issues that hold up approvals for renewable projects in rich nations to incentivizing clean-energy investment in the developing world.
The latter concern may be further addressed by von der Leyen, who announced on Monday that the European Union will help subsidize green bond issuance in poorer countries as way to mobilize private investments in environmentally friendly projects. Meanwhile, Babayev has already criticized the World Bank and the International Monetary Fund for not stepping up with more climate finance for developing countries.
Total installed renewable power capacity was 3.9 terawatts last year —a 14% increase from 2022, according to the International Renewable Energy Agency. One terawatt of solar is enough to power 180 million US homes.
In its new report, BloombergNEF identified regional differences in deployment of clean energy, with Brazil and China already on net-zero paths in their electricity sectors, while Japan, Indonesia and Middle Eastern countries lag far behind.
The vast majority of the world’s investment in solar and wind power so far has been in rich countries and China. Yet the countries that most need and have the potential for plentiful solar and wind power are developing nations. Cheap renewables are the “path to prosperity” for poor countries, said Kingsmill Bond, an energy strategist at the think tank RMI.
That’s why getting their fair share of clean energy funding will be a key fight for developing countries at COP29. The main focus of the upcoming UN summit, which starts in November in Baku, will be to agree on a new post-2025 goal for climate finance to emerging markets. Already some countries like India are calling for that figure to be in the trillions of dollars, which the European Union has said is unreachable. Rich nations have a patchy track record on meeting climate finance promises, previously missing a deadline to provide up to $100 billion per year by 2020.
Fewer than 100 countries have included renewable power deployment targets in their so-called nationally determined contributions, which are plans that must be submitted to the UN to show progress toward the Paris Agreement’s goal of keeping global warming ideally below 1.5C. New NDCs with targets for 2035 are required to be submitted by February next year.
The key bottleneck for renewables deployment in rich countries has been getting regulatory approvals tied to land acquisition or grid development. Wind energy, in particular, has faced an uphill battle and may be a laggard compared to solar development over the next several years.
“Solar will probably be pretty close or even exceed tripling,” BloombergNEF’s analyst Jenny Chase said on a recent episode of the Zero podcast. But based on current policies, “wind is not going to triple by 2030.” Even if wind power capacity were to triple, countries will need to increase battery capacity 16-fold to be able to optimally use its new renewable energy, according BNEF.
--With assistance from Greg Ritchie and John Ainger.
(Updates throughout with news from the Global Renewables Summit.)
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