Transforming the Progress of the ‘UAE Consensus’ at COP28 on Tripling Renewables through Greater Alignment of NDCs with National Energy Plans
One of the positive outcomes of COP28 in Dubai was the setting of a global target to triple renewable energy capacity by 2030. The so-called ‘UAE Consensus’ seems to have cemented the role of renewables as one of the most effective ways to address climate change and transition to a just and clean energy dispensation. As the ‘Custodian’ of the global renewable energy pledge, the International Renewable Energy Agency (IRENA) is committed to monitoring the progress towards achieving the targets on an annual basis and track COP28 commitments to maintain momentum to 2030. Francesco La Camera, Director-General of IRENA, here discusses the challenges and opportunities for renewables at a time when current global and national commitments fall short of the necessary levels required by between 30-50% by modernising existing physical infrastructure to support and accelerate the renewables grid system and regulatory architecture to facilitate investments and improve socio-economic and environmental outcomes, the urgent need to develop a ‘fit-for-purpose’ workforce, and the role of Islamic finance options especially innovative de-risking and credit enhancement involving also private capital in enhancing IRENA’s Energy Transition Accelerator Financing (ETAF) Platform and toolkit, to which the IsDB and ICIEC signed up to in Dubai.
ICIEC Quarterly Newsletter: Now that the fog of COP28 Dubai has settled, can you share your assessment of COP28 per se, and those relating in particular to achieving the Paris Net Zero targets by 2050, the holy grail of restricting global warming to 1.5ºC and the state of renewable energy in the global energy mix? What are the investment needs according to IRENA? How do they compare to where we are now?
By setting a global target to triple renewable energy capacity by 2030 to more than 11 TW, the UAE Consensus at COP28 in Dubai has successfully cemented the role of renewables as one of the most effective energy solutions to address climate change, creating unprecedented momentum and crystal-clear direction for the energy transition.
We are proud that IRENA’s World Energy Transitions Outlook served as the foundation for this target. The chance to achieve the goals of the Paris Agreement is slipping away, we cannot afford to miss the closing window of opportunity. Now it is on governments to match this increased ambition with concrete plan and action.
IRENA’s World Energy Transitions Outlook 2023 makes sober reading but also highlights the huge benefits a just energy transition could bring in terms of GDP growth, jobs, poverty alleviation, and remedies from the devastating impacts of climate change. Do you think the pledge made by Heads of State at COP28 to triple global renewable energy capacity by 2030 is achievable when funding commitments made on climate action at previous COPs were not met? Do you agree that accelerating transition progress worldwide requires a shift away from mindset and structures built for the fossil fuel era? In this respect what is your view on the UAE COP28 Presidency’s call for a Global Renewable Energy Target to complement that of the Paris one? Fossil fuel producers argue for an orderly transition period given the role they have in forex earnings, revenues, job creation, financing budgets and development agendas. Do you agree?
Doubling down on the energy transition should not be viewed as a cost, rather as an investment opportunity. Our analysis clearly shows that a renewables-based energy transition will help create jobs, grow the global economy, improve energy access and enhance energy security.
In fact, IRENA’s World Energy Transitions Outlook finds that the substantial job losses in conventional energy jobs would be more than offset by 2030 through gains in renewable energy and other energy-transition-related jobs. It is already concretely established that renewables are the most effective climate action tool available. The next frontier is to eliminate any lingering doubt about its business case and viability for economic growth and prosperity.
The Islamic Development Bank (IsDB) and its multilateral insurer, ICIEC signed Partners Agreements on accession to IRENA’s Energy Transition Accelerator Financing (ETAF) Platform in Dubai, focused on advancing just, affordable and clean energy transition in low-and-medium-income countries (LMICs). How will the ETAF Platform facilitate the financing of renewable energy projects in IsDB member states and how can we upscale the involvement of Islamic finance in climate action, mitigation, adaptation and finance, especially through a smart partnership between IRENA and ICIEC, specifically to boost the role of credit and investment insurers such as ICIEC in making renewable energy projects bankable to donors, institutional and private investors?
Last year was record-breaking in terms of renewable energy installations and investments. However, it is important to recognise that progress is not advancing equally across the world. In fact, over the past six years, the gap in renewable energy investment between developed and developing countries has widened considerably.
For example, in 2015, the per capita investment in renewable energy in Europe and North America (excluding Mexico) was nearly 23 times greater than in Sub-Saharan Africa. By 2021, this disparity grew further, with per capita investment in Europe outpacing that in Sub-Saharan Africa by 41 times, and in North America, the difference escalating to 57 times.
This is why IRENA is expanding its project and investment facilitation efforts to help narrow this gap and make affordable financing more accessible to developing countries. Through its Energy Transition Accelerator Financing Platform (ETAF), IRENA is creating a pipeline of energy transition projects and pairing them with investors to accelerate renewable energy deployment.
The platform, established in 2021 with support from the United Arab Emirates, aims to scale up renewable energy projects that contribute to Nationally Determined Contributions (NDCs) in developing countries, while also bringing benefits to communities through enhanced energy access and security, and promoting economic growth and diversification.
Today, the ETAF family is 13 partners strong, with collective pledges surpassing US$4 billion at COP28. The ETAF Platform also stands out for its inclusivity, offering a broad range of financial solutions and risk mitigation products. As members of ETAF, the Islamic Development Bank (IsDB) and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) have broadened the platform’s toolkit further with Islamic finance options, enhancing ETAF’s capacity to tailor its support to the unique requirements of numerous developing countries in the Islamic world.
There is a clear global target to triple renewable energy, but how do we ensure that the transition accelerates to that level? What are the main challenges, bottlenecks and impediments in advancing just energy transition through renewable energy?
To ensure that the growth in renewables reaches the necessary levels by 2030, IRENA’s World Energy Transitions Outlook identifies three priority actions for the coming years to urgently overcome existing systemic barriers from the fossil fuel era.
First, we must modernise and expand existing physical infrastructure to support and accelerate the development of a renewables-based energy system. According to IRENA analysis, approximately one third of the total power sector investment to 2030 must go into power grids and flexibility.
Secondly, we need to establish a new policy and regulatory architecture to facilitate investments and improve socio-economic and environmental outcomes. The energy transition is a system-wide effort, extending beyond just adding power, with new rules and regulations needing to be cross-cutting to encompass end-use sectors like industry, buildings, and transport.
Lastly, there is an urgent need to develop a workforce that is well-equipped to build and maintain a renewables-based energy system. This includes retraining and recertifying fossil fuel industry workers for careers in renewable energy.
Without addressing these three key areas, the world will not be able to triple renewables and accelerate the transition to the necessary speed and scale to limit rising temperatures to 1.5 °C.
As the “custodian” of the COP28 renewable energy pledge, where do you see the progress of the industry in 2030. Short of a doomsday scenario of climate apocalypse due to the failure of humanity meeting the cornucopia of targets, how optimistic are you that given the drive, determination and diligence of organisations such as IRENA, we can mitigate some of the worst effects of climate change through credible, just and affordable energy transitions?
There is undeniable progress being made, which will inevitably grow due to the momentum established by the ‘UAE Consensus’ at COP28. As the custodian of the global pledge, IRENA will track progress towards the global energy targets on an annual basis and track COP28 commitments to maintain momentum to 2030.
Our analysis indicates that current commitments fall short of the necessary levels by less than half to meet the tripling renewables pledge. Similarly, targets set in national energy plans and policies fall short by 30%.
The forthcoming round of NDCs in 2025 must bring a transformative leap forward. Renewable energy targets in NDCs must also be aligned with national energy plans to enhance the effectiveness and credibility of these commitments. It also sends a clear message to investors throughout the supply chain, promoting further growth in the renewable energy sector.
