GLOBAL renewable energy investment needs to triple to nearly $800 billion by 2050 in order to meet climate goals set out in the Paris Agreement, an intergovernmental organization said in a report.
Funding for renewables must accelerate if the Paris goal of keeping the average global temperature rise below 2 degrees Celsius, according to the International Renewable Energy Agency (IRENA).
“Annual investment in renewables would need to almost triple… to almost $800 billion (a year) through 2050,” it said.
IRENA said more investment is needed in system integration technologies like distributed energy resources, batteries and energy storage.
IRENA estimated that in the post-COVID years of 2021-2023, average annual investment of $2 trillion in renewables and other energy transition-related technologies have the potential to create 5.5 million additional jobs, according to a separate statement issued Wednesday.
In its report, IRENA said total global renewables investment between 2013 and 2018 amounted to $1.8 trillion, driven by falling costs and more efficient procurement.
It added that solar photovoltaic (PV) and onshore wind power took up the largest share of investment at 46% and 29%, respectively, during the five years to 2018.
The private sector remains the biggest provider of capital for renewables projects, accounting for 86% of investment during the period. The specific funding sources for such works were project developers (46%), commercial financial institutions (22%), and public finance (14%), according to IRENA.
East Asia and the Pacific attracted the most renewable energy investment, taking in 32% of global financial commitments during the five-year period. Regions dominated by developing economies were described as “consistently underrepresented,” taking in only 15% of the global total.
According to the report, solar PV and other solar products were responsible for the bulk of off-grid renewable energy investment.
The organization said that the share of investment from investors committing to off-grid renewables in Southeast Asia and Sub-Saharan Africa grew to over 33% from 1.6% in 2019. “(This was) driven by a surge in private investors’ activities (either) domestically or within the same region,” it said.
IRENA also reported that South and Southeast Asia were both able to attract over $244 million in off-grid renewable investment between 2007 and 2019, after a record $97 million last year.
IRENA supports countries in transitioning to sustainable energy. The Philippines is an IRENA member. — Angelica Y. Yang