International Renewable Energy Agency (IRENA)

The International Renewable Energy Agency (IRENA) is an intergovernmental organization that supports countries in their transition to a sustainable energy future and serves as the main platform for international cooperation, a center of excellence and a repository of policy, technology, resource and financial knowledge about renewable energy.

 

IRENA promotes the adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydroelectric, ocean, solar and wind energy for sustainable development, energy access, energy security and low carbon economic growth.

 

With a mandate from countries around the world, IRENA encourages governments to adopt enabling policies for investments in renewable energy, provides practical tools and policy advice to accelerate the deployment of renewable energy, and facilitates knowledge sharing and technology transfer to provide clean and sustainable energy for the world's growing population.

 

IRENA Report - Geopolitics of the Energy Transformation: The Hydrogen Factor

 

In January 2022, the International Renewable Energy Agency (IRENA) published the report “Geopolitics of the Energy Transformation: The Hydrogen Factor”, in which an in-depth analysis of the geopolitics of hydrogen is carried out. The report builds on IRENA's work in the field of hydrogen and benefits from input from experts in the fields of energy and geopolitics.

 

As countries globally seek to achieve net zero goals, hydrogen is increasingly an essential part of the energy transformation for decarbonizing the most difficult sectors to decarbonise. The possible path by which hydrogen could evolve involves many uncertainties. With the growing drive to establish a global hydrogen market comes the need for an in-depth understanding of its broad effects, including geopolitical aspects. In this regard, the report offers insight into how countries can shape the development of hydrogen markets and presents policy considerations to help mitigate geopolitical risks and capitalize on opportunities.

 

The main conclusions of the report were as follows:

 

• Hydrogen is part of a broader energy transition framework, and its development and deployment strategies should not be considered in isolation.
• The establishment of priorities for the use of hydrogen will be essential for its rapid expansion and long-term contribution to decarbonizations efforts.
• The 2020s could become the era of great race for technology leadership, as costs are likely to drop dramatically with learning and expanding the necessary infrastructure. Equipment manufacturing offers the opportunity to realize value for years and decades to come.
• Hydrogen trade and investment flows will generate new patterns of interdependence and bring about changes in bilateral relations.
• Countries with an abundance of low-cost renewable energy could become producers of green hydrogen, with commensurate geo-economics and geopolitical consequences.
• Hydrogen could be an attractive avenue for fossil fuel exporters to help diversify their economies and develop new export industries.
• Supporting the advancement of renewable energy and green hydrogen in developing countries is critical to the decarbonization of the energy system and global equity and stability.
• International cooperation will be needed to design a transparent hydrogen market with coherent norms and standards that significantly contribute to climate change efforts.

 

See full report [here].

 

IRENA Report - Renewable Energy Market Analysis: Africa and Its Regions

 

In January 2022, the International Renewable Energy Agency (IRENA) published the report “Renewable Energy Market Analysis: Africa and Its Regions” developed in collaboration with the African Bank of Development (AfDB). The report seeks to expose opportunities and challenges facing Africa.

 

An energy system focused on renewable energies can help solve many of Africa's social, economic, health and environmental challenges. An energy transition is essential for a climate-secure future in which the prerogatives of sustainable development are fulfilled. Renewable energies are key to overcoming energy poverty, providing needed energy services without harming human health or ecosystems, and enabling a transformation of economies in support of development and industrialization.

 

The main conclusions are:

 

• A large part of the African continent has been left behind in the energy transition, with only 2% of global investments in renewable energy in the last two decades taking place in Africa, with significant regional disparities.
• Africa has vast resource potential in wind, solar, hydro and geothermal energy and decreasing costs are making renewable energy affordable. Specifically, Central and South Africa have abundant mineral resources essential to produce electric batteries, wind turbines and other low-carbon technologies.
• In the last decade Africa has shown progress: The use of renewable energies has grown in the last decade, with more than 26 GW of generation capacity based on renewable energies. The biggest growth was in solar; The annual average of investments in renewable energy has increased tenfold, from less than USD 0.5 billion in 2000-2009 to USD 5 billion in 2010-2020; Distributed renewable energy solutions, including autonomous power generation and consumption systems and solar mini-grids, are playing a greater role in expanding access to electricity in isolated areas and strengthening supply in areas with access to electricity.
• Despite the difficult carbon-intensive energy transition, the energy transition, when accompanied by an appropriate policy set, is a huge opportunity for Africa. The energy transition, under the IRENA 1.5°C scenario, predicts a 6.4% increase in GDP, a 3.5% increase in employment across the economy and a social welfare index of 25.4 % higher than under current plans, on average until 2050.
• For the benefits to materialize, a set of comprehensive policies is needed that combine the pursuit of climate and environmental objectives, economic development, job creation and social equity and well-being for society, and the existence of strong institutions, international cooperation and considerable coordination at the regional level.

 

 See full report [here].

 

Renewable energy

 

Climate change, energy security, energy access and environmental pollution have placed the energy transition based on renewable energies at the forefront of national, regional and global concerns.

 

A commitment to renewable energy is essential if policymakers are to limit the temperature rise to 1.5°C by 2050, with net zero CO2 emissions. Renewables increasingly appear to be the lowest-cost source of electricity in many markets, demonstrating a decade of shift to renewable-based electricity generation, during which the cost of solar PV at scale has dropped by 85%. The impetus of renewable energy is further demonstrated by its resilience in the face of the COVID-19 pandemic.

 

The cost reduction has led to a substantial increase in capacity, with renewable energy technologies dominating the global market for new generation capacity. For greater shares of solar and wind in the energy mix, rapid advances have been made in digital technologies, battery storage and new business models.

 

Policy instruments have evolved rapidly, with competitive prices rapidly outpacing administratively determined tariffs. The number of countries adopting renewable energy auction systems increased from 16 in 2010 to 109 in 2020, reducing the average price of solar energy. The number of countries with renewable energy policies has increased. In 2019, 143 countries had policies for renewable energy in the energy sector, compared to 117 in 2014.

 

In 2020, investment in the global energy transition has reached a record. Investments in electrified transport are needed as policies supporting transport electrification increase. Policies for renewable energy in heating and cooling have received less attention, although there are expectations for an increase.

 

Investments in renewable energy remained concentrated in a few regions and countries. The Asia-Oceania region, led by China, attracts the most investment in renewable energy (on average, 55% in 2005-2019). Europe and the United States followed, with average shares of 20% and 16%, respectively, in 2005-2019. Regions dominated by developing and emerging economies remained underrepresented, attracting only around 15% of global investment. However, annual financial commitments for off-grid renewables supporting energy access in emerging and developing countries reached USD 460 million in 2019.

 

Most of the renewable energy funding is provided by the private sector – 86% in 2013-2018. Private capital came essentially from project promoters (46%), commercial financial institutions (22%). Institutional investors provide only a small portion of the funding, although this will change as the risks of investing in renewables decrease.

 

Public finances account for 14% of total direct investments in renewable energy assets, with public resources being spent to create an enabling environment for the deployment of renewable energy through regulatory instruments, tax incentives and other policies and measures. Public funding resources are crucial to reducing risk, overcoming initial barriers, attracting private investors and maturing new markets. Thus, they play a vital role in emerging and developing countries, exacerbated by the COVID-19 crisis, where investors' perception of risk is high.

 

The progress achieved in the deployment of renewable energy has resulted in relevant socio-economic benefits over the last few years, such as gains in jobs in the value chain. Most of the new jobs are in countries with major markets for the installation and manufacture of equipment related to renewable energy. But jobs are being created in construction and operations and maintenance.

 

The impact of the COVID-19 pandemic on renewable energy employment is not yet known, but renewable energy is successful compared to conventional energy. In many countries, delays in spring 2020 were followed by high activity later in the year. These impacts reinforce the importance of a comprehensive policy framework to align short-term recovery needs and long-term decarbonizations to ensure stable socio-economic benefits and a just transition.

 

Trends show the way to a decarbonized sector by 2050, having had little effect on increasing emissions. Progress falls short of what is needed to keep the global temperature rise to 1.5°C by 2050. A radical shift is needed based on available renewable energy and energy efficiency technologies. IRENA's 1.5°C scenario considers the objective of reducing global CO2 emissions following an accelerated downward trajectory from now to 2030 and a continuous downward trajectory, thereafter, reaching net zero by 2050.

 

Source: IRENA