IRENA calls for USD 35tn of investments to enable energy transition

The world has made some progress towards the goal to limit global warming to 1.5 degrees Celsius but is still lacking enough measures to stay on that track and needs to invest USD 35 trillion (EUR 32.29tn) by 2030 in order to make the energy transition possible.

Future investments in energy transition technologies should prioritise efficiency, electrification, grid expansion and flexibility, the International Renewable Energy Agency (IRENA) said in its World Energy Transitions Outlook (WETO). The new report was presented in Berlin on Tuesday.

Last year, global investment in energy transition technologies hit USD 1.3 trillion but the annual total should be more than USD 5 trillion to stick to the 1.5 degrees C scenario and in line with Paris Agreement goals, IRENA alarmed as it called for “bold, transformative measures.” It estimates that around USD 1 trillion of planned annual fossil fuel investment by 2030 must be redirected towards transition technologies and infrastructure to keep the target within reach.

In terms of capacity, IRENA estimates that deployment targets must grow from some 3,000 GW today to over 10,000 GW in 2030, an average of 1,000 GW annually. As deployments are presently limited mainly to China, the US and the European Union, which were responsible for 66% of last year’s new additions, increased investments are needed to back developing countries and emerging markets so that greater focus is put on energy access and climate adaptation.

“Pursuing fossil fuel and sectoral mitigation measures is necessary but insufficient to shift to an energy system fit for the dominance of renewables. The emphasis must shift from supply to demand, toward overcoming the structural obstacles impeding progress," said IRENA’s director-general Francesco La Camera.

IRENA highlighted the progress towards the 1.5 degrees goal in the power sector, with renewables already accounting for 40% of the global installed power generation capacity. With the record-high 295 GW of capacity deployments in 2022, renewables were responsible for roughly 83% of the world’s total power capacity additions.

(USD 1.0 = EUR 0.923)

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