COP28 nations pledge to triple RE by 2030
POWER & RENEWABLE ENERGY

COP28 nations pledge to triple RE by 2030

At the COP28 climate summit in Dubai, over 100 countries have agreed to triple renewable energy capacity by 2030?a commitment considered one of the least contentious at the conference. However, there is a lack of detailed plans on how to accelerate an industry already operating at full capacity.

Anders Opedal, CEO of Norway's Equinor, a major renewable energy developer, emphasised the realism of the goal but highlighted challenges such as permitting, leases, and grid connections. While renewable energy expansion is crucial for meeting the 2015 Paris climate agreement, achieving this new target of tripling capacity to at least 11,000 gigawatts (GW) within six years poses significant challenges.

The ambitious goal necessitates substantial investment in renewables, reaching $600 billion globally last year according to the International Energy Agency (IEA). However, investors are becoming cautious due to higher borrowing costs. Additionally, the renewables industry is grappling with shortages in supplies, a labour shortage, escalating project costs, and local opposition causing bureaucratic delays in obtaining permits.

Connecting to the grid is a prolonged process, and building new high-voltage transmission lines can take a decade or more. Francesco La Camera, Director-General of the International Renewable Energy Agency, expressed skepticism about overcoming identified barriers to achieve the 2030 target.

Despite the challenges, the industry has consistently surpassed historical growth forecasts, and capital and government support are at unprecedented levels. Ember predicts the addition of a record 500 GW of renewable capacity globally in 2023, with 12 countries, including China, Brazil, Australia, and Japan, set to exceed national targets.

However, financing the required growth poses a major challenge. Investment in renewables must more than double to over $1.2 trillion annually by 2030, according to the IEA. Higher interest rates have led infrastructure investors to tighten purse strings, complicating the financing and sale of projects.

The decline in infrastructure fundraising coincides with the critical need for funds to build networks connecting new projects to the grid. Some companies, such as Orsted, have faced setbacks and project cancellations due to logistical bottlenecks and rising costs.

While there is optimism about expanding supply chains with sustained demand, industry representatives emphasise the necessity of government support to address issues like permitting reform and grid delivery. Post-COP discussions are expected to focus on these crucial aspects to ensure the realisation of the ambitious renewable energy targets.

At the COP28 climate summit in Dubai, over 100 countries have agreed to triple renewable energy capacity by 2030?a commitment considered one of the least contentious at the conference. However, there is a lack of detailed plans on how to accelerate an industry already operating at full capacity. Anders Opedal, CEO of Norway's Equinor, a major renewable energy developer, emphasised the realism of the goal but highlighted challenges such as permitting, leases, and grid connections. While renewable energy expansion is crucial for meeting the 2015 Paris climate agreement, achieving this new target of tripling capacity to at least 11,000 gigawatts (GW) within six years poses significant challenges. The ambitious goal necessitates substantial investment in renewables, reaching $600 billion globally last year according to the International Energy Agency (IEA). However, investors are becoming cautious due to higher borrowing costs. Additionally, the renewables industry is grappling with shortages in supplies, a labour shortage, escalating project costs, and local opposition causing bureaucratic delays in obtaining permits. Connecting to the grid is a prolonged process, and building new high-voltage transmission lines can take a decade or more. Francesco La Camera, Director-General of the International Renewable Energy Agency, expressed skepticism about overcoming identified barriers to achieve the 2030 target. Despite the challenges, the industry has consistently surpassed historical growth forecasts, and capital and government support are at unprecedented levels. Ember predicts the addition of a record 500 GW of renewable capacity globally in 2023, with 12 countries, including China, Brazil, Australia, and Japan, set to exceed national targets. However, financing the required growth poses a major challenge. Investment in renewables must more than double to over $1.2 trillion annually by 2030, according to the IEA. Higher interest rates have led infrastructure investors to tighten purse strings, complicating the financing and sale of projects. The decline in infrastructure fundraising coincides with the critical need for funds to build networks connecting new projects to the grid. Some companies, such as Orsted, have faced setbacks and project cancellations due to logistical bottlenecks and rising costs. While there is optimism about expanding supply chains with sustained demand, industry representatives emphasise the necessity of government support to address issues like permitting reform and grid delivery. Post-COP discussions are expected to focus on these crucial aspects to ensure the realisation of the ambitious renewable energy targets.

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