One of the most eye-catching announcements at COP28, the 2023 UN climate summit in Dubai, was the agreement by 123 countries to triple global renewable energy capacity by 2030. If the pledge is met, renewables capacity will grow to an astonishing 11 TW, well above today’s total power generation capabilities.

The COP28 pledge reflects the central importance of renewable energy to the net zero transition. Renewables make possible the complete decarbonisation of power generation, and clean electricity can then be used to decarbonise other sectors, such as surface transport, buildings and parts of industry.  

The COP28 announcement also refers to the role of renewables in meeting the sustainable development goals (SDG), in particular SDG 7 on affordable energy for all. This aspect is perhaps less appreciated.  

The international debate on climate justice is still too focused on extending the role of fossil fuels in developing countries. Developing countries have urgent energy needs and they have contributed little to the climate problem. As such, they have a strong claim on the remaining carbon space in the atmosphere, which is now just 250 Gt of CO₂ for a 50% chance of remaining within 1.5°C warming.  

From an equity perspective this is surely right. However, in practical energy terms it is doubtful whether more carbon space is worth having. Why should countries base their development model on 20th century technology, when they can leapfrog to superior 21st century solutions?  

Each country has its own national circumstances, which will determine the remaining role of fossil fuels. Countries like Ethiopia and Zambia can combine renewables with abundant hydropower and move quickly. Others, like India and South Africa, have an existing fossil fuel infrastructure which will take time to unwind.

The point to note is that solar and wind are now competitive in all these contexts. Countries like India, Chile and China have among the lowest solar energy costs in the world and are home to some of the largest solar parks. We may soon be at a point where the levelised costs of solar are lower even than the operating (fuel plus maintenance) costs of fossil fuel-based power.

Off-grid applications like solar home systems are the mainstay of energy access programmes, as they are modular and obviate the need for expensive grid extensions. Increasingly, off-grid operators provide additional high value services, such as food cooling, milling, electric brick making or egg incubation. It is a powerful way to increase productivity and boost the local economy.

Rolling out renewables
Tripling renewables capacity within seven years translates into an annual growth rate of 17%. Even if this target is missed, renewables are moving from pioneer applications to large-scale roll out. They are an attractive business proposition not just for international operators, but for an emerging cohort of national clean energy champions.

The global roll out is changing the risk profile of renewable energy investments. A recent survey of project developers, carried out by the Oxford Smith School with support from SSE and Sustainable Energy for All, shows how concerns are shifting. The focus on technology risks, which dominated early projects, is replaced by business environment risks, such as market, macroeconomic and governance issues.

These risks are particularly notable in developing countries, and stronger business enablers are needed to boost deployment. The Smith School report puts forward 10 actionable measures which will help to accelerate the roll out of renewables.

The global roll out is changing the risk profile of renewable energy investments… The focus on technology risks, which dominated early projects, is replaced by business environment risks, such as market, macroeconomic and governance issues.

The 10 measures target all relevant stakeholders. Governments and regulators are asked to provide more supportive regulation on issues like planning, licensing and grid access. They can also stimulate demand through fair planning regimes and well-structured renewables auctions for renewable energy contracts. Development agencies must provide risk mitigation and finance, with credit lines to small business and consumers, if necessary on concessional terms. Project operators also need to innovate on service models (that is, energy-as-a-service), payment systems (pay-as-you-go using mobile banking) and expand supply chains. All parties need to ensure proactive engagement with local communities.

None of these recommendations will come as a surprise to project operators, certainly not those active in developing countries.  

The proposed solutions are also well understood. Tripling global renewables capacity in seven years is an ambitious but also critical task. It is reassuring, therefore, that the business models, tools and expertise to achieve it are increasingly available.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.