Annual monitoring by the International Renewable Energy Agency (IRENA) reveals that global progress towards achieving 11 terawatts (TW) of renewable power capacity by 2030 is falling short.
In 2023, only around 480 gigawatts (GW) of new renewable power capacity were deployed, far below the required approximately 1,000 GW. To stay on track for limiting global warming to 1.5°C, the world must add around 1,100 GW of capacity annually for the rest of the decade. This requires elevating annual investments in renewable power generation from 2023's $570 billion to an estimated $1.5 billion.
The most recent data from IRENA shows that in 2023, there was a significant increase in renewable power deployment, with 473 GW added to the global energy mix. Solar energy accounted for the majority of this growth, comprising 73%. The new capacity was primarily concentrated in China, the European Union (EU), and the United States, contributing 83% of the total additions.
Francesco La Camera, Director-General of IRENA, said: “In the wake of the historic UAE Consensus on tripling renewables at COP28, these capacity additions – despite setting a new record – clearly indicate that achieving the target is far from guaranteed. As the custodian agency, IRENA monitors related progress across key indicators every year. Our data confirms that progress continues to fall short, and the energy transition remains off track. We urgently need a systemic shift away from fossil fuels to course-correct and keep the tripling goal within reach."
Overcoming structural and systemic barriers is crucial, including modernizing infrastructure, establishing suitable regulatory frameworks, and enhancing institutional capabilities. Evolving policies, geopolitical dynamics, and the declining costs of renewable technologies have been pivotal in the sector's rapid expansion. Despite these positive trends, the goal of increasing renewable capacity necessitates a significant escalation of efforts across various domains.
Developing countries, despite harboring significant renewable potential, have attracted a meager fraction of global renewable investment. In contrast, fossil fuels continue to receive substantial subsidies, dwarfing the necessary investments for renewable generation capacity. In 2022, global leaders provided $1 trillion in subsidies to fossil fuels.
Scaling up finance for developing countries is essential for facilitating the energy transition and reaping its environmental and socio-economic benefits. Despite the global energy transition attracting over $2 trillion in investments in 2023, emerging market and developing economies (EMDEs) received disproportionately low levels of investment, accounting for just over half of global investments. Within EMDEs, excluding China, the share of investment was even lower, highlighting significant disparities.
Sub-Saharan Africa is particularly underfunded despite its large population lacking access to electricity. In the period from 2000 to 2020, the geographic region received less than 1.5% of global renewable energy investments. High capital costs and perceived risks hinder renewable project development in many developing countries, with Sub-Saharan Africa facing some of the highest costs of finance globally.
If the transition to clean energy is not accelerated, energy demand predictions suggest that global emissions could lead to a temperature increase of approximately 2.4 degrees Celsius by the end of the century. The International Energy Agency (IEA) emphasizes that the pace of emission reduction globally hinges on financing sustainable solutions to meet the energy demand of growing economies worldwide.
Despite the economic advantages of renewable energy sources like solar PV and onshore wind, many developing countries struggle to access affordable finance. International collaboration, including the involvement of multilateral development banks and increased public finance, is essential to address these challenges and accelerate the global energy transition.
