The ‘green’ decade is off to a bumpy start. Though carbon emissions have temporarily dropped, the pandemic has diverted governments’ attention away from climate and decarbonisation priorities. COP26 has been postponed to 2021. The fallout from the pandemic will hit governments and companies hard as they scramble to use recovery packages to restructure global economies.
But could the pandemic provide a rare opportunity to invest smartly and sustainably, and to accelerate the energy transition to renewables? A new UN report suggests that it could.
The report analyses 2019 investment trends and clean energy commitments made by countries and corporations for the next decade. The amount of new renewable power capacity added in 2019 was the highest ever for a calendar year, at 184 gigawatts (GW) – 20 GW higher than 2018. The extra capacity comes from new solar systems (118GW) and wind turbines (61GW).
Technological improvements and fierce competition in the renewable sector over the last decade have let to plummeting costs for wind and solar electricity facilities with the price of solar photovoltaic plants dropping 83 per cent in the second half of 2019. ‘If governments take advantage of the ever-falling price tag of renewables to put clean energy at the heart of Covid-19 economic recovery, they can take a big step towards a healthy natural world,’ says Inger Andersen, executive director of the UN Environment Programme.
Renewables have been chipping away at fossil fuel’s dominance; 78 per cent of new generating capacity added globally in 2019 came from wind, solar, biomass and waste, geothermal and small hydro. ‘We see the energy transition is in full swing, with the highest capacity of renewables financed ever. Meanwhile, the fossil fuel sector has been hit hard by Covid-19 – with demand for coal- and gas-fired electricity down in many countries, and oil prices slumping,’ says Nils Stieglitz, president of Frankfurt School of Finance & Management.
Investment trends indicate that energy use in the developing world in particualr will become more sustainable in the next decade. In 2019, developing countries committed $152.2 billion to renewables, compared to $130 billion for developed countries.
Despite such success, Renewable Energy 2030 targets – already written into policy by 87 governments – are modest, demanding only 721 GW of new renewable capacity over the next decade. The world added 1,213 GW of renewable power capacity in the 2010–2019 decade. Although the 2030 targets are evidently achievable, they fall short of what’s required to limit temperature increases to well below 2°C – the goal set out in the Paris Agreement. ‘Clean energy finds itself at a crossroads in 2020. The last decade produced huge progress, but official targets for 2030 are far short of what is required to address climate change,’ says Jon Moore, Chief Executive of BloombergNEF.
Covid-19 could make it more likely that 2030 targets are surpassed. Citizens experiencing cleaner city air during lockdown could pressurise governments to finally phase out fossil fuels. Plus, as governments attempt to boost economic activity, falling costs for renewables could lure investment. Svenja Schulze, minister of the environment of nature conservation and nuclear safety in Germany, thinks governments should seize the moment: ‘By promoting renewable energies within the framework of coronavirus economic stimulus packages, we have the opportunity to invest in future prosperity, health and climate protection.’