$12 Trillion Needed to Meet Renewable Energy Capacity Target

A commitment made by more than 100 countries at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held in Dubai on 30 November – 12 December 2023 aims to triple global renewable energy capacity by 2030. A new report by the international think tank Climate Analytics calculated the investments needed to achieve this target. According to the report, a total of USD 12 trillion in investment is required to triple global renewable energy capacity by 2030. Of this investment, USD 4 trillion is needed for grid and storage infrastructure. While total investment need is calculated at USD 2 trillion annually through 2030, this figure means that current investment levels need to be doubled. However, the pace of steps required to triple global renewable energy capacity varies by region. In this context, sub-Saharan Africa needs a sevenfold increase in renewable energy capacity to align with the global target. OECD countries are estimated to double their renewable energy capacity by 2030, but this would place OECD countries behind the commitment made at COP28. In the Asia region, renewable energy capacity needs to increase by approximately fourfold by 2030. Driven largely by policies in China and India, Asia is expected to be the only region to substantially achieve the target of tripling capacity. However, significant coal and natural gas pipeline infrastructure in these countries is creating stranded asset risk or slowing the transition. According to the report, to limit global temperature rise to 1.5 degrees, renewable energy capacity worldwide needs to continue growing robustly and increase fivefold by 2035 compared to 2022 levels.

The safest option

Neil Grant, lead author of the report and Climate Analytics expert, commented on the report as follows: "USD 2 trillion per year sounds like a cost, but it's actually a choice. Over the next 10 years, more than USD 6 trillion will be invested in fossil fuels, a figure more than sufficient to bridge the investment gap needed to achieve the target of tripling renewable energy capacity. When faced with this choice, I would choose renewable energy, which is the safest and most valuable option." Climate Analytics Policy Director Claire Fyson emphasized that OECD needs to triple its renewable energy capacity, saying: "However, regions claiming to be climate leaders are currently far from this target. Countries in these regions need to act not only by increasing renewable energy in their own countries, but also by mobilizing finance for other regions that need it to contribute to the tripling target." Bruce Douglas, Chief Executive of Global Renewables Alliance, stated that the renewable energy sector is ready to achieve this target, but governments need to urgently accelerate renewable energy investments to reach this goal in time.

Douglas underscored the importance of public finance, concluding as follows:

"International support providing access to low-cost capital, especially to enable developing markets to join the renewable energy era, is critical to ensuring a clean, secure and just transition for all." Source