The case of renewables has helped pave the way for an impressive growth in new capacity, writes Adnan Amin
A sustainable energy future is within our grasp ... if we take action now
The world has embarked on a major energy transition, underpinned by renewable energy. The implementation of the Paris Agreement and Sustainable Development Goals are poised to further bolster this transition. Matching a long-term vision for transforming the energy sector in line with these objectives is critical considering the fact that energy is responsible for two-thirds of global emissions. In this context, Irena’s new study, Perspectives for the energy transition: Investment needs for a low carbon energy system, finds that an energy transition in line with the "below 2 °C" objective by 2050 is both technically feasible and economically attractive.
At the heart of this global energy transition is the strong business case of renewable energy. In only a few years, we have seen the costs of renewables fall at a remarkable pace. Solar PV module costs have dropped by as much as 80 per cent since 2009, and wind turbine costs have fallen by almost a third in the same period. In Abu Dhabi, where Irena is based, the contract for a solar PV park of 1.177 gigawatts at a price of US 2.42 cents/kWh was just signed.
The proven business case of renewables has helped pave the way for an impressive growth in new capacity. Just last year, renewable generating capacity increased by 161 gigawatts, making 2016 the strongest year ever for new additions. Notably, over 50 per cent of these additions were in developing countries. While these figures show a clear trend, they alone do not capture just how pronounced the ongoing transition has become. California, a state with a GDP larger than France, generated 80 per cent of its power from renewable energy sources in mid-May. About two weeks later, in the UK, solar satisfied 24 per cent of electricity demand, outpacing nuclear energy for the first time.
Meanwhile, many countries around the world are raising their ambitions to accelerate renewable energy deployment. For instance, China announced earlier this year that it was investing billions in renewable power generation by 2020. The increasing participation of the largest oil and gas producing countries, however, reflects the true scale of the energy transition.
Saudi Arabia recently launched its national renewable energy programme, while Russia is now moving ahead with its largest-ever renewable energy auction. In the UAE, the country announced last January that it would cut carbon emissions by 70 per cent and have 44 per cent of power generation from renewables by 2050.
The energy transition is not only limited to national governments. Numerous cities have committed to reaching total reliance on renewables. In the private sector, companies are increasingly choosing renewables to power their businesses. Earlier this year, Google announced that it is set to power all of its global operations from renewables.
Irena’s analysis shows that renewable energy and energy efficiency measures can achieve 90 per cent of the required emissions reductions to decarbonise the energy sector by 2050. While the net additional investment needed to undertake the transition would amount to trillions of dollars over the next 35 years, significant savings due to reduced health impacts from air pollution and climate change would significantly exceed the costs. Furthermore, this energy transition could generate employment opportunities for up to 26 million people.
Reaping such benefits requires not only technological innovation, but also innovation in policy, business models and market design. Innovative solutions can help integrate higher shares of variable renewable energy in power systems, attract investments, drive cost reductions, provide incentives to enhance system flexibility and help accelerate the deployment of renewables in sectors where it is lagging behind.
Innovation is precisely what the Zayed Future Energy Prize seeks to support and foster. Innovative solutions like this can create impact at a global scale and accelerate our shift to an energy system based on renewables. The prize reflects the commitment and leadership role of the UAE in the energy transition, which is home to Masdar City and Irena, the global renewable energy organisation with near-universal membership. Ultimately, this pursuit of innovation is a testament to the bold vision of Sheikh Zayed, the Founding Father of the United Arab Emirates.
If we take action now to catalyse innovation and accelerate the renewables revolution, a sustainable energy future is within our reach.
Adnan Amin is Director-General of the International Renewable Energy Agency (Irena) and a jury member of the Zayed Future Energy Prize