The world is falling short of achieving the 1.5°C pathway, according to the World Energy Transitions Outlook 2023 Preview released by the International Renewable Energy Agency (IRENA) at the Berlin Energy Transition Dialogue. The preview calls for a fundamental course correction in the global energy transition, which demands bold and transformative measures reflecting the urgency of the present situation. Despite progress being made in the power sector, where renewables account for 40% of installed power generation globally, the deployment levels are limited to certain parts of the world, with China, the European Union and the United States accounting for two-thirds of all additions in 2022. Developing nations are further behind.
To keep the 1.5°C target alive, deployment levels need to grow from some 3,000 GW today to over 10,000 GW in 2030, an average of 1,000 GW annually. The preview warns that a lack of progress further increases investment needs and calls for a systematic change in the volume and type of investments to prioritise the energy transition. Although global investment in energy transition technologies reached a new record of $1.3tn in 2022, yearly investments must more than quadruple to over $5tn to stay on the 1.5°C pathway. The preview further emphasizes that any new investment decisions should be carefully assessed to simultaneously drive the transition and reduce the risk of stranded assets.
IRENA’s Director-General Francesco La Camera highlighted that public sector intervention is required to channel investments towards countries in a more equitable way, particularly towards developing countries. Achieving the energy transition requires stronger international collaboration, including collective efforts to channel more funds to developing countries. La Camera further emphasized that a fundamental shift in the support to developing nations must put more focus on energy access and climate adaptation. Moving forward, multilateral financial institutions need to direct more funds, at better terms, towards energy transition projects and build the physical infrastructure that is needed to sustain the development of a new energy system. The World Energy Transitions Outlook (WETO) provides an energy transition pathway in line with Paris Agreement goals, limiting global temperature rise to 1.5°C. The forthcoming 2023 edition will contribute to the first Global Stock take concluding at COP28 in the United Arab Emirates and will propose effective ways to accelerate progress over the next five years towards 2030.
