Renewable energy is already high on the agenda at the COP28 climate summit, with 118 countries, including the UAE, Brazil, Japan and the EU, pledging last weekend to triple the world’s renewable energy capacity by 2030.
But it’s not simply about signing up to the ambition. The crux is how to achieve that goal. Without this, the world is going to be reliant on fossil fuels for much longer than currently envisaged.
The reality is that the world is not moving with anything like the determination, pace and scale needed to meet the target, with a series of obstacles hamstringing our ability to ramp up renewables capacity.
In the past days, we have seen comments from influential figures, including IRENA director general Francesco La Camera and Aramco chief executive Amin Nasser, that meeting this ambition is like “mission impossible”, and that the renewable energy coming to market is still insufficient to meet demand.
A recent KPMG study identified 10 financial, policy and legislative hurdles that need to be overcome to scale renewables and keep alive the ambition of the 2015 Paris Agreement – to cap global warming at around +1.5 degrees Celsius above pre-industrialised levels.
Some of these barriers are well-known. Our grid infrastructure, designed for the fossil-fuel intensive electricity generation of the 20th century, is woefully outdated. A truly net-zero grid must be decentralised and will require enormous flexibility and intelligence to balance variable supply and demand consistently. Regulation will play its part in this. Even as sales of electric vehicles soar, grid operators in the US are struggling to get approvals to upgrade the infrastructure to support EV charging.
Across the world, lengthy planning and permitting processes, coupled with a lack of knowledge about renewables, are obstructing renewable development projects. In the UK, it takes an average of 12 years to plan, permit and develop an offshore wind plant. Renewables planning can be reformed and has led to landmark policies, such as the EU’s RePowerEU framework, which recommends short and straightforward permitting processes for renewable development projects.
Other challenges need to be better understood. The transition to renewable energy will require an enormous amount of capital – particularly in emerging markets, where significant barriers and risks, such as reliance on coal and the upfront costs of renewables, deter investors.
We also know that the raw materials needed to meet the demand for renewables is currently concentrated in a few countries. China produces most of the silicon used for solar panels, 60% of the world’s wind blades and a large proportion of the minerals needed for batteries, including nickel, lithium and graphite. Overcoming geopolitical barriers will therefore need to be part of the solution.
Meanwhile, we must be cautious to mitigate the impact of “green-on-green conflicts” and deploy renewables thoughtfully so that scaling them does not at the same time damage nature and biodiversity. And we must ensure that the social and economic impacts, and benefits, of the transition to renewable energy are fairly distributed – that it is a just transition.
The good news is that we are on a decent path.
In the past two decades, we have made significant progress in advancing renewables. Around 30% of the world’s energy now comes from renewable sources. In the UK, renewable energy now supplies 42% of generated electricity, up from 3% in 2000. The International Energy Agency forecasts that global renewable capacity additions could reach 440 gigawatts this year – the equivalent of the combined power capacity of Germany and Spain – and could increase by a further 550 gigawatts in 2024.
This is impressive. But the sobering truth is that the run rate will still fall short in delivering the promise of a sustainable future. In practical terms, we will need to install more than 1,200 gigawatts of renewable energy capacity annually by 2030 to meet our goals.
This should spark a sense of urgency. The pathway to accelerating our progress remains viable, but our window of opportunity is narrowing. We must be hard-headed and clear-eyed about what’s required to meet the 2030 renewables target, and then double the ambition if the world is to be net-zero by 2050. The time for global cooperation is upon us. The consequences of failure are just too awful to think about.
Reuters - Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.
Mike Hayes is Climate Change and Decarbonization Leader and Global Head of Renewable Energy at KPMG International. He has been involved in the global renewables business for the past 20 years and, over the last 8 years, has been focusing on climate change and decarbonization for clients around the world. Mike leads a KPMG team collaborating with the World Economic Forum on sustainable energy and climate innovation.