The global clean energy transition is accelerating, driven by multiple factors. The momentum is driven by growing concerns about climate change, energy security, and economic opportunities. Here's a breakdown of the key trends:
Investment and Growth:
- The UN International Energy Agency’s Electricity 2024 report forecasts that renewable energy is set to overtake the world’s use of coal by early 2025 and will account for more than one-third of the world's total electricity generation.
- Global clean energy investment reached a record $1.8 trillion in 2022, a 17% increase from 2021. This represents a significant shift, with every $1 invested in fossil fuels now met by $1.7 in clean energy. (BloombergNEF)
- Renewables lead the charge: Solar photovoltaic (PV) and electric vehicles (EVs) are driving much of this growth. Solar PV capacity installations are expected to double by 2025 compared to 2022 levels, and EV sales are projected to reach 50% of global car sales by 2030. (IEA– UN International Energy Agency)
- At the COP28 climate meeting, the Green Climate Fund received a boost with six countries pledging new funding, bringing the total to a record USD 12.8 billion from 31 countries. Additionally, new commitments were made to the Least Developed Countries Fund, the Special Climate Change Fund, and the Adaptation Fund.
Policy and Regulation:
- The Paris Agreement and national net-zero pledges are providing a strong policy framework for the transition.
- The Clean Energy Transitions Programme of the IEA supports emerging economies in implementing their goals.
- Carbon pricing: More countries and regions are implementing carbon pricing mechanisms, encouraging the shift away from fossil fuels.
- Action on methane: COP28 saw the launch of the Global Methane Pledge, a commitment by over 100 countries to reduce methane emissions by 30% by 2030. This is a significant step forward, because methane is a potent greenhouse gas with a much shorter lifespan than carbon dioxide.
- Governments worldwide are implementing policies to support the clean energy transition, such as carbon pricing, renewable energy targets, and green infrastructure investments.
- Food systems: COP28 also saw a major focus on food systems, with 159 countries signing the COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action. This declaration commits signatories to integrate food and food systems into their national climate plans by 2025.
Technological advancements:
- Cost reductions: The cost of clean energy technologies, particularly solar and wind power, has been dramatically declining, making them increasingly competitive with fossil fuels.
- Innovation in storage: Advances in battery storage are helping to manage the variability of renewable energy and enabling wider grid integration.
- Hydrogen potential: Green hydrogen produced from water using renewable electricity may be a promising fuel for industries and transportation sectors that are difficult to decarbonize.
Innovation in areas like energy storage, smart grids, and carbon capture and storage is paving the way for a more sustainable and efficient energy system.