IRENA Energy Transitions Report

In July 2023, the International Renewable Energy Agency (IRENA) released the Report: World Energy Transitions Outlook 2023: 1.5°C Pathway. The Report outlines a vision for the transition of the energy landscape to reflect the goals of the Paris Agreement, presenting a pathway for limiting global temperature rise to 1.5°C and bringing CO2 emissions to net zero by mid-century.

 

The 1.5°C Scenario describes an energy transition pathway aligned   with the 1.5°C climate goal to limit global average temperature increase by the end of the present century to 1.5°C, relative to pre- industrial levels. It prioritises readily available technology solutions, which can be scaled up to meet the 1.5°C goal.

 

The key messages of the report were:

• The energy transition is off-track. The aftermath of the COVID-19 pandemic and the ripple effects of the Ukraine crisis have further compounded the challenges facing the transition. The stakes could not be higher - every fraction of a degree in global temperature change can trigger significant and far-reaching consequences for natural systems, human societies and economies.
• Limiting global warming to 1.5°C requires cutting carbon  dioxide (CO2) emissions by around 37 gigatonnes (Gt) from 2022 levels and achieving net-zero emissions in the energy sector by 2050. Despite some progress, significant gaps remain between the current deployment of energy transition technologies and the levels needed to achieve the goal of the Paris Agreement to limit global temperature rise to within 1.5°C of pre-industrial levels by the end of this century. A 1.5°C compatible pathway requires a wholescale transformation of the way societies consume and produce energy.
• Current pledges and plans fall well short of IRENA’s 1.5°C pathway and will result in an emissions gap of 16 Gt in 2050. Nationally Determined Contributions (NDCs), long-term low greenhouse gas emission development strategies (LT-LEDS) and net-zero targets, if fully implemented, could reduce CO2 emissions by 6% by 2030 and 56% by 2050, compared to 2022 levels. However, most climate pledges are yet to be translated into detailed national strategies and plans - implemented through policies and regulations - or supported with sufficient funding. According to IRENA's Planned Energy Scenario, the energy-related emissions gap is projected to reach 34 Gt by 2050, underscoring the urgent need for comprehensive action to accelerate the transition.
• Annual deployment of some 1 000 GW of renewable power is needed to stay on a 1.5°C pathway. In 2022, some 300 GW of renewables were added globally, accounting for 83% of new capacity compared to a 17% share combined for fossil fuel and nuclear additions. Both the volume and share of renewables need to grow substantially, which is both technically feasible and economically viable.
• Policies and investments are not consistently moving in the right direction. While there were record renewable power capacity additions in 2022, the year also saw the highest levels of fossil fuel subsidies ever, as many governments sought to cushion the blow of high energy prices for consumers and businesses. Global investments across all energy transition technologies reached a record high of USD 1.3 trillion in 2022, yet fossil fuel capital investments were almost twice those of renewable energy investments. With renewables and energy efficiency best placed to meet climate commitments - as well as energy security and energy affordability objectives – governments need to redouble their efforts to ensure investments are on the right track.
• Every year, the gap between what is achieved and what is required continues to grow. IRENA’s energy transition indicators show significant acceleration is needed across energy sectors and technologies, from deeper end-use electrification of transport and heat, to direct renewable use, energy efficiency and infrastructure additions. Delays only add to the already considerable challenge of meeting IPCC-defined emission reduction levels in 2030 and 2050 for a 1.5°C trajectory. This lack of progress will also increase future investment needs and the costs of worsening climate change effects.