In response to the IRENA report, the power transition has gone astray

The current German coalition government wants to accelerate the country’s transition away from fossil and nuclear fuels towards renewable and sustainable production energies.

Sean Gallup | News from Getty Images | Getty Images

The global energy transition is derailed to prevent the worst effects of the climate emergency, says the head of the International Renewable Energy Agency, and a fundamental course correction is needed to successfully shift away from fossil fuels.

A report published by IRENA on Tuesday said that by 2030, $35 trillion in additional investment in transition technologies would be needed to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

This temperature threshold relates to the intended target of the landmark Paris Agreement.

It is widely viewed as a crucial global goal, as so-called tipping points beyond this level of global warming become more likely. Tipping points are thresholds where small changes can lead to dramatic changes in the entire life support system of the earth.

“We’re off course,” Francesco La Camera, director general of IRENA, told CNBC’s “Squawk Box Europe” on Tuesday.

La Camera said IRENA’s findings show that progress has been made in the energy transition, particularly in the energy sector where renewable energy accounts for 40% of installed electricity generation worldwide – but the scale and magnitude of change remains far behind the 1.5- degrees Celsius path back .

According to IRENA, deployment levels need to increase from around 3,000 GW today to more than 10,000 GW in 2030.

The agency also noted that deployment is limited to certain parts of the world, with China, the EU and the US accounting for two-thirds of all new arrivals in 2022, further trailing low-income countries.

“Survival Guide for Mankind”

The IRENA report comes shortly after the world’s leading climate scientists published a “Survival Guide for Humanity”.

The United Nations Intergovernmental Panel on Climate Change said earlier this month that the unprecedented challenge of keeping global warming to 1.5 degrees Celsius has become even greater in recent years due to the inexorable rise in global greenhouse gas emissions.

The IPCC said deep, rapid and sustained reductions in greenhouse gas emissions across all sectors are needed to limit warming to 1.5 degrees Celsius.

The IRENA report, meanwhile, said that a successful global energy transition must include bold and transformative actions that reflect the urgency of the climate crisis.

A vehicle drives past a dry cracked lake bed in drought-stricken Lake Mead en route to Boulder Harbor September 15, 2022 in Boulder City, Nevada.

Frederic J. Brown | AFP | Getty Images

Investments, comprehensive policies around the world and across sectors must take steps to scale up renewable energy, the report adds, and implement the structural changes needed for a predominantly renewable energy transition.

“The process we support cannot be stopped. So we’re moving to a new energy system that’s largely dominated by renewable energy, complemented by hydrogen — mainly green hydrogen — and the sustainable use of biomass,” La Camera told CNBC.

“In the medium to long term that will happen, so the question is not where are we going,” he added. “It’s important to understand that the most important variable is time.”

Stranded assets warning

Certainly the burning of fossil fuels like coal, oil and gas is the main driver of the climate crisis.

Big Oil made record gains last year as fossil fuel prices soared following Russia’s massive invasion of Ukraine. Company executives have tried to defend record earnings amid a barrage of criticism in recent months, typically emphasizing the importance of energy security in the transition to renewable energy.

Saudi Arabia’s state-controlled oil giant Aramco on Sunday announced plans to build a $10 billion refinery and petrochemicals complex in northeast China over the next three years, and said the company wanted to meet Beijing’s growing demand for fuels and chemicals support products.

When asked if companies are choosing to invest in the traditional oil and gas sector and if doing so amounts to a lost investment in renewable energy, La Camera replied: “There is no doubt that this is not the right direction from our perspective. It will produce stranded assets.”

“That’s why we insist on … working on focusing on infrastructure, but also shifting our attention from the supply side of the problem to the demand side,” he added.

“We really hope that the UNFCCC conference in Dubai will lead the way to build a new narrative that can better align investments in the years to come and also accelerate the energy transition,” said La Camera.

The UAE will host the COP28 climate summit from November 30th to December 12th.

Comments are closed.