The global community has the potential to achieve the objectives established during the COP28 conference last year, which involve tripling the installed capacity of renewable power generation and doubling the pace of energy efficiency advancements. This can be accomplished through “additional international efforts,” especially focusing on solar photovoltaic (PV) technologies, battery installations, and grid enhancements.
The latest report from the International Energy Agency (IEA), titled ‘From Taking Stock To Taking Action’, released this week, highlights these key findings. The report emphasizes that reaching the objectives outlined at the COP28 conference, known as the “UAE Consensus,” is highly feasible. Nevertheless, the report cautions that there is no assurance that the world will achieve its 2030 climate goals. As a result, the report presents two scenarios for the global energy sector by the end of the decade: one involving the complete adoption of the COP28 agreements and the other involving partial implementation.
Achieving the initial objective, for example, would necessitate a threefold increase in the worldwide installed capacity of renewable power generation, rising from approximately 3,690GW in 2022 to surpass 11TW by the end of the decade. The report highlights that under the stated policies scenario (STEPS), which projects the global energy mix if governments effectively enforce announced policies, the global installed capacity of renewable power would only reach 9,770GW by the decade’s end, as illustrated in the graph provided below.
Under the STEPS outcome, global installed renewable power generation capacity would rise by 2.7 times, falling slightly short of the goal to triple capacity by 2030. This indicates that the current business-as-usual scenario is inadequate when compared to the potential benefits of fully implementing the proposed measures.
The report highlights that solar photovoltaic (PV) and wind energy will play crucial roles in moving the global energy mix towards the full implementation scenario rather than the STEPS outcome. It points out that solar PV has experienced a 90% reduction in its average generation cost over the past decade, while the average cost of onshore wind has dropped by two-thirds during the same period.
This aligns with comparable findings from the International Renewable Energy Agency (IRENA), which reported a 12% decrease in the levelized cost of electricity (LCOE) within the solar sector between 2022 and 2023.
Improving grids and batteries
The IEA report emphasizes that enhancing grid accessibility will be vital for achieving the more ambitious targets set for 2030. It highlights that by the end of 2023, approximately 3 terawatts (TW) of renewable energy capacity were pending grid connections worldwide, which is roughly equivalent to the total renewable power capacity that has commenced commercial operation over the past 15 years.
Although this conclusion is not entirely new—DNV has previously indicated that global grid capacity must increase by approximately 2.5 times by 2050—the IEA report underscores the necessity for significantly higher investments in the grid to achieve this goal. It states that annual average grid investment must more than double, rising from around $330 billion in recent years to over $700 billion by the end of the decade. This figure exceeds BloombergNEF’s estimate for annual grid investment in the coming years by more than $100 billion.
Gazing past 2030, sustained grid investments will remain essential to fulfill the world’s long-term climate objectives. According to the IEA report, approximately 25 million kilometers of electricity grids must be “constructed or upgraded” by 2030 to align with the complete implementation scenario, with an additional 55 million kilometers required by 2035.
The IEA report emphasizes the need for increased investment in battery storage projects to enhance the flexibility of renewable energy-powered grids. Previous data from the IEA and Bloomberg New Energy Finance indicated that battery storage was the most heavily invested energy technology in 2023, showcasing the rising enthusiasm for the battery industry. The latest IEA data indicates that, to align with the complete implementation scenario, global battery storage capacity must surpass 1.5 terawatts (TW) by 2030.
To achieve this objective, the world must ramp up investments in battery storage systems. As highlighted in the IEA report, investments will need to surge to approximately $140 billion by 2030, which is seven times higher than the recent levels and more than 50% greater than the investment allocated in the STEPS scenario.
Improving energy efficiency
Apart from investing substantial amounts in renewable energy installations, the IEA report underscores the importance of enhancing the efficiency of renewable energy technologies to optimize clean power generation. The report defines “energy efficiency” as the economic output per unit of energy input, a metric aimed at gauging global economic productivity. Therefore, energy efficiency is influenced by various measures, including the adoption of clean cooking practices, that may not directly impact solar PV efficiency gains.
Nevertheless, the report highlights the potential for enhancing energy efficiency through “improvements in the rate of efficiency of new appliances,” a factor crucial for achieving the ambitious energy efficiency targets outlined in the report. In 2022, the global electricity sector witnessed a 2% enhancement in energy efficiency, with the STEPS projection aiming to raise this figure to 2.4% by the decade’s end. However, the report emphasizes that a yearly energy efficiency advancement of 4% will be necessary to fulfill the objectives of the complete implementation scenario.
Advancements in technical efficiency play a crucial role in the worldwide solar industry, with significant progress being made in the development of perovskite cells in recent years. In the previous year, scientists at the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia achieved a milestone by creating a perovskite silicon tandem cell with a remarkable power conversion efficiency of 33.2%, setting a new record for this type of cell. This achievement was followed by a similar breakthrough this week from Fraunhofer ISE in Germany.
The German engineering association VDMA anticipates that silicon-based tandem solar cells, boasting a power conversion efficiency of up to 27%, will commence commercial production by 2027. This indicates that although the most advanced research in cell efficiency is not yet commercially available, the progression towards more efficient solar cell technologies is bringing them closer to the widespread implementation required to achieve the climate objectives set by the IEA.
“According to the latest IEA report, the energy objectives set for COP28 should serve as the cornerstone for countries’ updated climate targets within the Paris Agreement—they represent the guiding light for the necessary actions in the energy sector,” stated Fatih Birol, the executive director of the IEA. “Furthermore, enhanced international collaboration is essential to ensure the development of efficient grids, adequate energy storage, and accelerated electrification, all of which are crucial for facilitating swift and secure transitions towards clean energy.”
