Two international bodies agree to strengthen collaboration, as IRENA revises down its estimates for renewables costs through to 2050
Scaling up renewables capacity and electrifying infrastructure around the world could deliver more than three-quarters of the energy-related emissions reductions needed to meet global climate goals, according to a new analysis from the International Renewable Energy Agency (IRENA) highlighting the plummeting cost of clean energy.
Setting out its energy roadmap to 2050, IRENA said electricity had the potential to cover half the world's final energy consumption, up from 20 per cent today, thereby more than doubling power consumption.
The bulk of that demand - 86 per cent - could be met by renewables, the report said, with the primary drivers for increased power capacity coming from one billion electric vehicles, increased use of electricity for providing heat, and the emergence of renewable hydrogen. Overall, it estimated renewable energy could supply two-thirds of final energy by 2050.
Meanwhile, IRENA also released revised statistics showing the cost of reaching climate goals is continuing to fall rapidly thanks to plummeting prices for renewables such as wind and solar, and a projected decline in the money spent on fossil fuel subsidies.
The Abu Dhabi-based body estimated $15tr of additional investments in renewables, electrification, and energy efficiency would be needed worldwide by 2050, a figure 40 per cent lower than its forecast from a year ago. Overall, it said $110tr of investment would be needed to decarbonise the global energy system by 2050, saving $10tr over the period thanks to a reduction in fossil fuel subsidies.
Moreover, IRENA estimated that a shift in line with its 2050 roadmap would save the global economy up to $160tr cumulatively over the next 30 years in avoided health costs, energy subsidies, and climate damages. Every dollar spent on the energy transition would pay off up to seven times, while the economy would grow by 2.5 per cent, it said, although it warned climate damages could still lead to "significant socio-economic losses".
IRENA's new director-general Francesco La Camera, who took up his post just last week, said the race to secure a climate safe future had "entered a decisive phase". "Renewable energy is the most effective and readily-available solution for reversing the trend of rising CO2 emissions," he said. "The shift towards renewables makes economic sense. The global energy transformation goes beyond a transformation of the energy sector. It is a transformation of our economies and societies."
The update came as IRENA and the International Energy Agency (IEA) inked a deal that will see the world's two top energy bodies team up more closely in support of a "more secure, affordable and sustainable world energy system".
The two influential agencies have previously worked together on a number of activities, and the Memorandum of Understanding agreed yesterday will see them strengthen collaborative efforts further, including through the exchange of statistics, shared policy analysis, and joint events and training.
They said there was a need to step up their joint efforts as the global energy system "is witnessing rapid changes driven by the imperative to ensure energy security and achieve universal access to energy, while limiting adverse climate and environmental impacts".
IRENA's La Camera and the IEA's director-general Fatih Birol, signed the joint agreement at an event in Berlin, as they both stressed the need to greatly accelerate the shift towards a low carbon and renewable energy.
Birol emphasised the need for "urgent action to reverse current unsustainable trends". "Global CO2 emissions are increasing, while progress in renewables and energy efficiency is not fast enough," he said. "This agreement allows us to combine our respective strengths to tackle this challenge and foster faster global progress towards a more secure, affordable and sustainable world energy system, in line with the UN Sustainable Development Goals."
The new partnership follows renewed criticism of the IEA over its future energy scenario forecasting, which has repeatedly come under scrutiny for underestimating the potential growth of renewables, and continuing to suggest growing global demand for fossil fuels for decades to come.
The IEA's annual World Energy Outlook, which outlines future energy trends, is widely referenced by policymakers and key energy companies, and is therefore seen as hugely influential.
But last week around 60 business leaders, scientists and investors wrote to IEA, calling on it to "make clearer that [its] business as usual scenario… charts a dangerous course to a world with between 2.7C and 3C of warming", according to Climate Home News.
The IEA claims it has consistently used its forecasting to highlight the need for much stronger policy action to meet global climate targets.
But signatories of the letter called on the body to shift its forecasting so that its Outlook's central scenario is in line with the economic changes needed to limit global warming to 1.5C, the higher ambition goal of the Paris Agreement.
"The IEA's current 'sustainable development scenario' either commits the world to warming beyond 1.5C or will need to rely on large amounts of negative emissions in the far future to try to make up for this - the most robust science suggests that both cases are inconsistent with sustainable development," said Joeri Rogelj, one of the letter's signatories and a lead author at the IPCC. "By neglecting projected impacts, the current policy scenario very much looks like an enchanted mirror that is afraid of looking reality in the eye."
Campaigners will be hoping that IRENA's latest analysis and the promise of closer co-operation between the world's two leading energy agencies will increase the chances of the industry's projections finally being pulled into line with the decarbonisation trajectories the Paris Agreement demands.
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