COP28 agrees to triple renewables by 2030

COP28 ended a day late with nearly 200 countries agreeing to transition away from fossil fuels, and to triple renewable energy and double energy efficiency.

The agreement, finalised on December 13, has been hailed as a harbinger of the end of the oil age. That’s despite it falling far short of an agreement to “phase out” oil, gas and coal, which scientists agree contribute about 75% of the world’s climate-damaging CO2 emissions.

The renewables component, while not binding, is nevertheless evidence of a clear intent to change for the better. And it is doable, though it will take fierce commitment, say experts.

The Global Renewables Alliance said the deal “represents a step-change in the world’s journey to a clean, secure and just energy future”. This “marks the beginning of the end of the fossil-fuel era,” it added.

“Tripling renewable energy capacity to 11,000 GW and doubling energy efficiency by the end of the decade is the most impactful and cost-efficient way of keeping the world on course for 1.5C,” the alliance continued.

“Renewable energy technologies are mature, cost-competitive and can be deployed at scale very fast. When combined with long duration storage, green hydrogen and smart grids they offer a reliable and flexible solution,” it said.

“This outcome is really historic: the COP28 decided on the transition away from fossil fuels and towards renewables and energy efficiency,” added Peter Liese, chair of the EU delegation. “Nuclear energy also has its place. The adopted text does not mention the word ‘phase-out’, but it is a ‘phase-out’ of fossil fuels. I expect the stocks of renewables, energy efficiency and nuclear energy to go up.”

The renewables goal had been debated throughout the two-week conference. Near the start of the meeting, in Dubai, 118 nations had pledged to triple the world’s renewables capacity by the end of the decade, and to reduce the share of fossil fuels by 2050 at the latest, though without the backing of majors such as China and India.

COP28’s final agreement came with the summit’s president and oil executive Sultan al-Jaber claiming that the goal “aligns more countries and companies around the North Star of keeping 1.5 degrees Celsius within reach than ever before”. He referred to the Paris Agreement’s 2015 goal for avoiding the worst effects of the climate crisis.

To triple renewables, much needs to change. A recent International Renewable Energy Agency (IRENA) report found that G20 countries’ commitments made for the Paris Agreement are actually “less than half” of what is required to up renewables by a factor of three by 2030.

An “urgent and significant escalation of commitments” is needed, said the agency.

IRENA noted, in a newsletter issued during COP28, that 2022 had seen the largest ever annual increase in renewable energy, which now accounts for 40% of global installed power capacity.

“However, the scale and extent of renewables deployment in and across different sectors and regions is uneven, falling short of a just and equitable 1.5^°C pathway,” it said. If the needs of the 1.5^°C pathway are to be met, fossil fuels need to be phased out and annual investments in the energy transition quadrupled, said IRENA.

As per IRENA's 1.5^°C pathway, and the COP28 pledge to triple renewable power globally, renewable power generation capacity in the G20 countries alone would need to grow from less than 3 TW in 2022 to 9.4 TW by 2030, accounting for 80% of the global total, said IRENA.

But think-tank Ember says the goal is well within reach, and if countries continue to add renewables at the same annual growth rate of 17% as they did from 2016-2023, then the goal will be met.

Ember forecasts that as much as 500 GW of renewable capacity is expected to be added worldwide in 2023, up from 300 GW in 2022, with a dozen countries, including Australia, Brazil, China and Japan, on track to exceed national targets.

BloombergNEF is less optimistic longer-term, forecasting renewables in 2030 at about 9,000 GW, whereas 11,000 GW would be needed to meet the goal, which is just six years away.

Nor will it come cheaply. Consultancy Wood Mackenzie puts the cost of tripling renewables at $2.7 trillion annually, while Ignacio Galán of Spanish renewables giant Iberdrola has said it will cost $2.2 trillion annually. That is as long as there is enough “regulatory stability, adequate financing and institutional commitment”, he said.

Galán’s projection is also in line with an estimate by the IEA, that renewables financing needs to more than double to $1.2 trillion-plus annually by 2030.

Be that as it may, it will not be easy, say many of those involved.

"It is realistic, but there are elements that need to be solved; permitting, leases, grid connections," cautioned Anders Opedal, chief executive of Norway's Equinor, a major renewable energy developer, in an interview with Reuters.

There has been a major downturn in offshore wind projects in development recently, for example, in Europe and the US because of inflation, supply chain bottlenecks and slow permitting.

Last month, the world’s biggest offshore wind developer Ørsted scrapped two major US projects off New Jersey, and announced it would have $5.6bn in related impairments.

Investment in infrastructure needs to match the investment in renewables dollar for dollar, Galán told Reuters. "For every dollar invested in renewables, we need to see the same invested in the networks required to integrate them," he said.

Inflation is hitting infrastructure investment hard, especially in the Global South, where general investment in renewables is tough. In the first nine months of 2023, infrastructure funds raised were $29bn globally, down dramatically from the $128bn during the same period in 2022, reported Reuters citing research firm Preqin.

“I don't see clear signs that we are ready to overcome the barriers we have identified,” Francesco La Camera, director-general of IRENA, told the news service.

"[This] needs a discussion right after the COP; how do we deliver the grids, how do we get the permitting reform, how do we look at auctions?" Morten Dyrholm, a marketing executive at Vestas Wind Systems, the world’s largest wind turbine manufacturer, said to Reuters.