IRENA: Limiting global warming still possible, but G20 must step up 

At a glance

World Energy Transitions Outlook 2024: 1.5°C Pathway. International Renewable Energy Agency (IRENA), November 2024.

The International Renewable Energy Agency (IRENA) has published an outlook for the energy transition that warns how much more must be done to limit global warming to 1.5 C, while remaining optimistic that it is still possible and economically viable to do so by achieving net-zero emissions by 2050. This will require making good on the promise made last year at COP28 in Dubai to triple renewable power capacity and double the annual rate of energy efficiency improvements by 2030 — at a cost of US$47 trillion this decade. The proposed scenario would also involve scaling up the production of green hydrogen and carbon capture and storage. With current national climate plans and targets projected to deliver just half the renewable capacity needed, and emissions still rising, IRENA calls on wealthy countries in the G20 to take the lead.

The report stresses the importance of international collaboration to reach climate targets and support energy transitions in developing countries. The recent agreement at COP29 in Azerbaijan to triple the annual contribution of climate financing to $300 billion by 2030, reached after this report came out, is one step. G20 countries, responsible for most emissions, should propose more ambitious Nationally Determined Contributions (NDCs) ahead of next year’s COP30 in Brazil. This could also drive economic growth and support the UN Sustainable Development Goal of everyone having access to affordable and reliable clean energy.

Key findings

• Record emissions: Global carbon dioxide emissions reached a record high of 37.4 gigatonnes in 2023.
• Renewable power expansion: Renewable power capacity must triple by 2030, requiring annual additions of 1,044 gigawatts to reach 11.2 terawatts.
• More investment needed: Achieving net-zero emissions by 2050 will require $47 trillion in cumulative investments by 2030, averaging $6.7 trillion annually.
• Energy access: About 660 million people in developing countries are projected to lack electricity by 2030.
• G20 countries are pivotal: The biggest economies are responsible for over 70 per cent of global energy demand. The scenario would have them account for 84 per cent of installed renewable capacity by 2030.
• Equity and inclusion: Structural economic changes are essential for achieving sustainable energy goals and a just transition.

Take a look

Bigger picture

Although renewable energy deployment reached record levels in 2023, the report says global carbon dioxide emissions also soared to a record 37.4 gigatonnes. This is not evenly distributed. G20 countries are responsible for more than 80 per cent of global energy consumption. Moreover, China, the United States, Brazil, India and Germany received the majority of the $570 billion invested in renewable capacity investments in 2023. Meanwhile, half of the world’s population, living in over 150 economies, received just 10 per cent of these investments. The report says annual investment in the entire global energy sector must grow by more than 2.5 times to meet the Paris Agreement targets and that it be distributed more evenly.

The report lays out a pathway to reaching net zero and staying within the 1.5 C limit by 2050 that involves a “deep transformation” in both the generation and consumption of power. This proposed scenario would see renewable sources generate 91 per cent of global electricity by 2050, while electricity would represent just over half of all energy consumption. The proposed scenario would also see G20 countries produce 75 per cent of the global demand for clean hydrogen and cover 95 per cent of carbon capture by 2030.

Outdated and unequal infrastructure, including related to the grid, are among the significant barriers. Industries such as transportation and heavy manufacturing need to scale clean hydrogen solutions and electrify operations. New regulations and market designs are needed for the age of renewables, which will also require changing institutional human resource capacities. Integrating artificial intelligence into energy systems also presents both opportunities for efficiency and challenges in managing increased demand.

The report says G20 nations need to lead the way in expanding renewable power generation capacity, increasing electrification and energy efficiency, and deploying technologies such as clean hydrogen and its derivatives and carbon capture to decarbonize hard-to-abate sectors. They can do this with bold policy changes, innovative financing solutions and making energy equity a priority. Next year, when countries are required to submit updated NDCs, provides an opportunity to correct the course on the road to net zero.

Challenges and opportunities

Key barriers to energy transition progress:

• Geographical disparities: Investment is concentrated in a few countries. Perceived risks leave developing regions, particularly in the Global South, struggling to attract financing.
• Policy and regulatory frameworks: Outdated regulations and market structures fail to incentivize investments in flexible and renewable energy systems, such as storage and grid upgrades.
• Inadequate infrastructure: Insufficient transmission networks and outdated grids cannot support the necessary increased use of variable renewable energy like solar and wind.
• Technological challenges: High costs of emerging technologies, such as green hydrogen and carbon capture, hinder widespread adoption in industries and heavy transport.
• Slow progress: Key sectors, including heating and transport, lag in electrification. Global energy intensity improvement remains below the 4 per cent annual requirement to meet 2030 goals.
• Energy inequality: Millions in developing regions lack access to modern energy.
• Workforce and skills gap: Insufficient institutional capacity hampers the scaling of renewable energy projects and addressing technical challenges.

To address these challenges, the report recommends:

• Expanding international collaboration and climate finance: Governments and multilateral organizations must meet the COP29 $300 billion target and ensure greater funding for the Global South. Options such as wealth taxes, and redirecting fossil fuel subsidies could help de-risk investments in high-risk regions.
• Grid and storage infrastructure: Policymakers must prioritize modernizing grids and scaling energy storage solutions to increase system flexibility. To prevent bottlenecks, IRENA recommends 1–2 MW of storage capacity for every 10 MW of renewable energy.
• Accelerating clean technology deployment: Industries should invest in scaling green hydrogen production and integrating carbon capture technologies. Support from clear regulatory frameworks, subsidies and mandates for decarbonizing hard-to-electrify sectors is needed.
• Streamlining energy planning: Aligning national energy strategies with long-term climate goals can reduce uncertainties and encourage investment. Expanding collaborative planning models like the Global Coalition on Energy Planning (GCEP) can improve co-ordination and reduce costs.
• Electrification and energy efficiency: Governments should incentivize electrification in transport and buildings while boosting energy efficiency through tax credits for heat pumps and building retrofits. Public awareness campaigns can further encourage consumer adoption of sustainable technologies.
• Workforce development: Industries and governments should collaborate on training programs focused on renewable energy technologies, grid operations, and advanced manufacturing to address skills shortages.
• Ensuring a just transition: Targeted programs can address energy poverty, ensuring that renewable energy expansion improves access for underserved populations. Emerging markets with large populations lacking energy access must prioritize decentralized renewable solutions like off-grid solar.

In their own words

Despite record growth in renewables deployment in 2023, fossil fuels continue to dominate the energy mix in major economies, and each year the chances of meeting the goals of the Paris Agreement become increasingly remote.

World Energy Transitions Outlook 2024: 1.5°C Pathway, International Renewable Energy Agency (IRENA), November 2024.

Final thoughts

The World Energy Transitions Outlook 2024 lays out a feasible roadmap for achieving global climate and energy goals, while asking the wealthiest countries to do the heavy lifting. It also highlights the broader implications of the energy transition, especially the opportunity to foster resilience and economic equity, including through more renewable capacity investments in the Global South. The authors promote greater renewable energy generation combined with expanding electrification and improved energy efficiency as the core to a successful energy transition. They also champion a major role for other technologies such as green hydrogen and carbon capture and storage, even though many questions remain about their effectiveness. The report could have also further explored innovative financing mechanisms, as well as how circular economies could reduce waste and the environmental impact of clean technologies.

Download the full report originally published by the International Renewable Energy Agency (IRENA) in November 2024.