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The International Renewable Energy Agency (IRENA) reported that global investment in energy transition technologies (including energy efficiency) reached $1.3 trillion last year, a record high.
report, Global State of Renewable Energy Finance 2023found that global investment in energy transition technologies in 2022 is up 19% from investment levels in 2021 and 50% above pre-pandemic levels in 2019.
In a joint report released by the International Renewable Energy Agency (IRENA) and the Climate Policy Initiative (CPI) on the sidelines of the Spanish International Conference on Renewable Energy in Madrid, investment Renewable energy will reach a record $0.5 trillion in 2022, less than 40% of the average investment required each year between 2021 and 2030, according to IRENA’s 1.5.°Scenario C. Investments to meet the targets set by the 2030 Agenda for Sustainable Development have also fallen short.
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All-time high investment still missing
Efforts to increase off-grid investment as decentralized solutions are essential to closing the access gap and reaching universal energy access to improve livelihoods and well-being under the 2030 Agenda is needed. Renewable energy sector. Investments in off-grid renewable solutions will be needed in the sector between 2021 and 2030, even though in 2021 he will reach a record annual investment of over $500 million. Well below $2.3 billion a year.
In addition, investments have become concentrated in specific areas technology Use with In 2020, solar power alone attracted 43% of total renewable energy investment, with onshore and offshore wind accounting for 35% and his 12% share respectively. Based on preliminary figures, this concentration is likely to continue until 2022. To best support the energy transition, more money needs to flow into less mature technologies, as well as into non-electrical areas such as heating, cooling and system integration.
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Comparing renewable energy financing across countries and regions, the report shows that the apparent gap has widened significantly over the past six years. About 70% of the world’s population lives mainly in developing and emerging countries, receiving only his 15% of global investments in 2020. Sub-Saharan Africa, for example, received less than her 1.5% of the amount invested globally from 2000 to 2020. In 2021, per capita investment in Europe was 127 times higher than in sub-Saharan Africa and 179 times higher than in North America.
Renewable energy financing to developing countries must be reformed
The report highlights how financing for developing countries looking to adopt renewable energy must be reformed, not only to reduce investment risks but also to strengthen public finance. Emphasizes the need to play a role. Recognizing the limited public funding available in developing countries, the report calls for stronger international cooperation, including a significant increase in financial flows from the Global North to the Global South. increase.
IRENA Executive Director Francesco La Camera said:
“This joint report underscores the need to direct public funds to regions and countries with untapped renewable energy potential that are difficult to attract investment to. These funds must be aimed at enabling the development of policy frameworks, energy transition infrastructure and addressing persistent socioeconomic gaps.”
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Realization of energy transition in line with 1.5°Scenario C also requires $0.7 trillion annually to be redirected from fossil fuels to technologies related to the energy transition. But fossil fuel investments are now on the rise after his 2020 temporary decline due to COVID-19. Some large multinational banks have increased their investment in fossil fuels by an average of about $0.75 trillion annually since the Paris Agreement.
Moreover, the fossil fuel industry continues to benefit from subsidies, doubling in 51 countries in 2021. The phase-out of investment in fossil fuel assets should be combined with the removal of subsidies to level the playing field with renewables. However, phasing out subsidies requires an adequate safety net to ensure an adequate standard of living for vulnerable populations.
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Barbara Buchner, Global Managing Director of CPI, said: Our figures show record levels of investment in renewable energy last year, but greater scale-up is essential to avoid dangerous climate change, especially in developing countries. is. ”
This is the third edition of the biannual joint report by IRENA and CPI. This report series analyzes investment trends by technology, sector, region, funding source, and financial instrument. It also analyzes funding gaps to support informed policymaking for deploying renewables on the scale needed to accelerate the energy transition. This third edition focuses on the period 2013-2020 and provides preliminary insights and figures for 2021 and 2022.
Read full text Global State of Renewable Energy Finance 2023 report.
