Renewable Energy Executive Summary 2024 PDF

Executive Summary 13\ SDG 7.2 Renewable energy\ Target 7.2 aims at increasing the share of renewable energy in the global energy mix and raising per capita\ generating capacity from renewable sources. In 2021, the share of renewable energy in total final energy\ consumption (TFEC) was 18.7 percent...

Executive Summary 13\ SDG 7.2 Renewable energy\ Target 7.2 aims at increasing the share of renewable energy in the global energy mix and raising per capita\ generating capacity from renewable sources. In 2021, the share of renewable energy in total final energy\ consumption (TFEC) was 18.7 percent. The share of modern renewables---that is, excluding traditional uses of\ biomass---was a low 12.5 percent---just four percentage points higher than in 2010. This is despite significant growth\ in modern renewable energy consumption, which increased by over 30 percent during this period, owing chiefly to\ the deployment of electricity generated from renewable sources. While no quantitative milestone has been set, the\ current trend is neither in line with the target nor consistent with internationally agreed climate objectives.\ To keep global climate targets in reach, the deployment of renewable energy must accelerate across the three\ key categories of electricity, heat, and transport. Renewable electricity represents one-third of global renewable\ energy consumption and half of modern renewable energy consumption. Use of renewable electricity increased by\ almost half between 2015 and 2021, driven mostly by wind and solar PV deployments. The rise increased renewables'\ share in total electricity consumption from 23 percent to 28.2 percent. Meanwhile, renewables' share in energy used\ for heating was 23.5 percent in 2021, but more than half of that came through traditional use of biomass (of which 95\ percent was in Africa and Asia). Excluding renewable electricity and ambient heat, the share of modern renewables\ was just 10.4 percent. Renewables' share in transport energy demand climbed to 4.4 percent of in 2021, up from 3.5\ percent in 2015, when biofuels (crop-based ethanol and biodiesel) still dominated. The growth was driven by the rise\ in electric vehicle sales and a higher proportion of renewables in transport-related electricity. Renewable electricity\ used in vehicles and trains grew 34 percent during this period, representing almost one-fifth of growth in renewables'\ share in total energy consumed for transport.\ Renewables-based generating capacity continues to rise. In 2022, it reached 424 watts per capita globally: 1,073\ watts per person in developed countries and 293 watts per capita in developing countries. The 2022 average is more\ than double that of ten years prior.\ Progress across regions and countries varies widely depending on resource availability, policy support,\ consumption patterns, and energy efficiency performance. Latin America and the Caribbean show the highest\ share of use of modern renewable energy, at 28 percent of TFEC in 2021, chiefly due to the consumption of bioenergy\ for industrial processes and biofuels for transport, as well as the important role of hydropower in the region. Between\ 2010 and 2021, the United Kingdom and Indonesia made the greatest progress in the use of modern renewables\ (up 9 and 7 percentage points, respectively, in TFEC). The two countries were closely followed by China, India, and\ Germany, which chalked up increases of between 6 and 7 percentage points.\ The actions needed to triple renewable capacity by 2030 as agreed at COP28 in Dubai vary significantly by\ country, region, and technology. The so-called UAE Consensus that emerged from the meeting calls for a tripling of\ the world's renewable power capacity by 2030. That consensus, agreed to by more than 130 countries, must now be\ embedded in national and international renewable energy targets and plans---accompanied by strong policy action.\ Deployment efforts in developing countries should be underpinned by international collaboration and finance to help\ achieve global energy and climate ambitions while reducing inequalities. Tracking SDG 7: The Energy Progress Report 202414\ SDG 7.3 Energy efficiency\ Target 7.3 calls for doubling the globe's progress on energy efficiency and reaching rates of improvement in\ energy intensity of 2.6 percent annually between 2010 and 2030---double the average of the previous two\ decades. However, because global progress was slower than hoped in all years except 2015, the rate of improvement\ in energy efficiency required from 2022 to 2030 must now exceed 3.8 percent, roughly in line with the International\ Energy Agency's Net Zero Emissions by 2050 Scenario and the COP28 agreement to double progress in energy\ efficiency.\ Regional trends show disparities in energy efficiency progress in 2021, following the COVID-19 slowdown\ during 2020. Despite increases in energy consumption, all regions reduced their energy intensities---a good sign\ in what is still an anomalous year in terms of energy trends due to the pandemic. The economic recovery boosted\ GDP growth to above 4.5 percent in all regions, with Central and Southern Asia growing at a 7.6 percent rate. With\ respect to energy intensity, Oceania achieved the greatest improvement (at 7 percent). However, Northern America\ and Europe improved by a mere 0.2 percent, putting downward pressure on global progress.\ Between 2010 and 2021, 14 of the 20 countries with the largest energy supply accelerated their rate of\ improvement in energy intensity over the previous decade. But only three (China, the United Kingdom, and\ Indonesia) exceeded the 2.6 percent improvement target. This group formerly included Japan and Germany, until\ a slowdown in 2021 pulled their average below the threshold. Six countries (Mexico, France, Indonesia, Japan,\ Türkiye, and Italy) more than doubled their rate of improvement in 2010--21 compared with 1990--2010. That group\ includes both high-income and major emerging economies, suggesting that all types of countries can make major\ improvements in energy efficiency.\ End-use trends showed improvements in energy intensity across all sectors in the 2010--21 period. In industry---\ comprising energy-intensive economic activities---energy intensity improved by an average of 1.6 percent per year.\ Passenger transport reached a similar rate (1.6 percent), though the rate of improvement in freight transport was\ significantly lower (0.4 percent). The residential sector (which comprises final uses such as heating, cooling, and\ cooking) showed an average annual improvement of 0.9 percent. Energy intensity in agriculture improved at an\ annual rate of 1.6 percent for the 2010--21 period, matching the rate for industry and passenger transport.\ Shifts to more efficient and renewable sources for the generation of electricity and to the electrification of\ end uses are contributing to improvements in energy intensity. Increased generating efficiency reduces energy\ intensity through improvements in fossil fuel generation, phase-outs of inefficient technologies, and a growing share\ of renewables to the electricity mix. The efficiency of generation using fossil fuels has increased steadily since 2010,\ despite a stall in 2021, following the record increase in energy demand as the pandemic eased. End-use electrification\ is reducing energy intensity through the adoption of heat pumps and electric vehicles, the electrification of basic\ industries in emerging market and developing economies, and other means. Executive Summary 15\ SDG 7.a.1 International public financial\ flows to developing countries in support\ of clean energy\ Although international public financial flows to developing countries in support of clean energy research and\ renewable energy production rebounded to USD 15.4 billion in 2022 (a 25 percent increase from 2021), support\ remains far short of the 2016 peak of USD 28.5 billion. While there is no quantitative target for international public\ financial flows under indicator 7.a.1, the current trend shows that the world is not on track to meet the goal of expanding\ access to clean energy research and technologies for countries in need, especially among least-developed countries,\ landlocked developing countries, and small island developing states.\ A relatively small group of funders is responsible for most flows; their decision-making significantly affects flow levels\ and the technologies funded. The 2022 comeback was driven almost entirely by European sources. It was characterized\ by multipurpose financial instruments and a broad range of renewable energy technologies and electrification programs,\ technical assistance, energy efficiency programs, and other supporting infrastructure.\ Regionally, international public investment flows changed substantially between 2021 and 2022 in all developing\ regions except Sub-Saharan Africa. After four years of decline from the 2016 peak and a year of stagnation during the\ pandemic, flows increased substantially between 2021 and 2022 in most world regions, led by Latin America and the\ Caribbean (which showed an increase of nearly USD 2 billion), Western Asia and Northern Africa (up by nearly USD 1\ billion), and the category of "unspecified countries" (up by more than USD 1 billion). On the other hand, flows to Sub-\ Saharan Africa increased only modestly; those to Central Asia and Southern Asia decreased substantially (by nearly USD\ 1.2 billion); and those to Eastern Asia and South-eastern Asia also fell, but less dramatically.\ Country commitments remain heavily concentrated, although they are gradually diversifying. In 2021, 80 percent of\ commitments were spread among 19 countries, as opposed to 25 countries in 2022. The top five recipients of international\ public flows in 2022 were Brazil, South Africa, Egypt, Uzbekistan, and India. The 45 least-developed countries received\ slightly more (+8 percent) international flows for clean energy in 2022 (USD 2.3 billion) than in 2021 (USD 2.1 billion), but\ relative to the total flows the share of money going to these countries decreased from 17 percent to 15 percent, below the\ historical average of 21 percent. The 40 small island developing states received the highest disbursements on a per capita\ basis. Some of these states are among the most successful in attracting international public flows.\ Debt instruments accounted for two-thirds of flows in 2022, down from more than 90 percent in 2010, and the share\ of grants, equity, and guarantees grew by 50 percent over 2021. The choice of financial instrument is as important as\ the quantity of flows, as many recipient countries struggle with high ratios of debt to GDP. Incurring more debt would likely\ hinder their development and their capacity to repay loans. Ideally, international public financing for recipient countries\ should include larger shares of nondebt instruments and concessional loans rather than loans at market rates.\ As 685 million people continue to live without access to energy and clean cooking, adequate financing to ensure\ universal access must be a key priority. More innovative financing instruments and initiatives are needed to support\ underinvested countries to benefit from the energy transition without compromising their fiscally constrained economies.\ Here, public finance will play a pivotal role in providing energy service solutions to unserved and underserved areas,\ mobilizing private capital to this end, and bridging end users' affordability gaps. Within the wider public finance ecosystem,\ multilateral development banks, governments, and other relevant actors should work together to shift the focus of energy\ transition projects from simple bankability toward impact at the program or portfolio levels. Tracking SDG 7: The Energy Progress Report 202416\ The outlook for SDG 7\ Certain policy responses to the global energy crisis appear likely to improve the outlook for renewables and energy\ efficiency. However, the energy crisis, inflation, and a dour macroeconomic outlook will probably hold back progress on\ access to electricity and clean cooking, as well as growth in financial flows.\ Access to electricity. Despite setbacks between 2020 and 2022 due to recent global crises, initial data for 2023 gathered\ by IEA indicates that the number of people globally without access to electricity has returned to a downward trend, albeit\ tepidly, with increases in solar home system sales in Sub-Saharan Africa helping close some of the gap left by debt-laden\ utilities after the crisis. Still, 660 million people will still lack access in 2030, 85 percent of them in Sub-Saharan Africa.\ Achieving universal access by 2030 will require significant investment, policy support, and the deployment of renewable\ energy.\ Access to clean cooking. The IEA and WHO estimate that 1.8 billion people will still lack access to clean cooking by\ the end of the decade under today's policies and if current trends continue. Significant progress has been made in Asia,\ but in Sub-Saharan Africa the number of people without access is growing, as access to clean cooking has failed to\ keep pace with population growth. New commitments to prioritize clean cooking within multi-lateral fora and in African\ countries, are improving the outlook, compared to previous years. This outlook has further upside potential due to the\ additional commitment of USD 2.2 billion at the Summit for Clean Cooking in Africa, which comes in addition to the African\ Development Bank's commitment of USD 2 billion over the next 10 years, as well as funding already available from the\ World Bank and GCF.\ Renewable energy. Strong growth in electricity generation from renewable sources is expected to continue, with\ renewables surpassing coal as the largest source of electricity generation by 2025 under today's policies. In the UAE\ Consensus, more than 130 countries pledged to triple total global installed renewable power capacity by 2030 over the\ 2022 level. The current pipeline of announced renewable projects will bring the world around 80 percent of the way to\ this target, according to IEA. However, IRENA calls for more policy interventions and to further increase ambitions to close\ the final gaps with more international cooperation and financial support. Still more is needed outside the electricity sector.\ IEA's Net Zero Emissions by 2050 Scenario and IRENA's 1.5°C Scenario, both of which outline ambitious energy pathways\ to SDG 7, estimate that modern renewables must reach 32--35 percent of TFEC by 2030 to keep the world on track,\ whereas under current policies this share reaches only 23 percent by the end of the decade, up from 18 percent today.\ Energy efficiency. The global push for energy efficiency has gained momentum, driven by increasing energy costs and\ concerns over energy security. Despite this, early estimates for 2023 show only a modest 1.3 percent rate of improvement\ in energy intensity. Achieving the 3.8 percent annual rate of improvement in energy efficiency to meet SDG 7.3 will require\ robust policy actions and a significant increase in investment. Doubling the current rate of energy efficiency, as agreed in\ the UAE Consensus, may require even more ambitious action.\ Financing and investment needs. The achievement of the SDG 7 targets demands a substantial increase in clean energy\ investments. IEA estimates an average annual investment of around USD 3 trillion in the energy sector by 2030, with\ significant portions dedicated to renewable power and end-use efficiency. Simultaneously, IRENA's 1.5°C Scenario will\ require an average annual outlay of USD 4.5 trillion in investments through 2030. These investments would focus on\ renewables, energy efficiency, and low-carbon technologies and would include power grids, storage, and other enabling\ infrastructure. Closing the investment gap, particularly in developing countries, is paramount for advancing the energy\ transitions and ensuring universal access to clean energy and technologies. 18Photo: © Gettyimages\ CHAPTER 1