International Renewable Energy Agency says $131tn investment in renewables could be required over three decades.
Renewable electricity production needs to grow eight times faster than the current rate to help limit global heating, according to a report.
The International Renewable Energy Agency (Irena) said urgent action was needed to keep pace with rising demand for electricity, which could require a total investment of $131tn in renewables by 2050.
Francesco La Camera, the director general of Irena, said the “window of opportunity” to achieve the goals of the Paris climate agreement was closing fast.
“The recent trends show that the gap between where we are and where we should be is not decreasing but widening. We are heading in the wrong direction,” La Camera said. “We need a drastic acceleration of energy transitions to make a meaningful turnaround. Time will be the most important variable to measure our efforts.”
The agency’s outlook report says keeping a lid on rising temperatures will require electricity to surpass fossil fuels as the dominant source of energy before 2050, as more economies electrify transport and heating to help cut carbon emissions.
Clean electricity will also be in high demand to produce “green hydrogen” to burn in heavy industry and manufacturing plants where direct electrification is not possible.
The surge in electricity use could mean that electric power will make up just over half of all energy consumed by 2050, compared with 21% in 2018. Fossil fuels have made up almost two-thirds of energy consumption in recent years but may be reduced to 10% by 2050.
The agency believes that the world had already passed its peak oil demand before the slump in the market for transport fuels during the coronavirus pandemic, and gas should peak within the next three years.
Irena’s scenario is in stark contrast to the future modelled by the oil and gas giant Shell, which predicts that demand for gas will continue to climb until the mid-2030s at the earliest before beginning to decline.
The agency expects oil to decline to 4% of the world’s energy use by 2050, gas to peak in 2025 before falling to 6%, and coal to fall to 2% by the middle of the century.
La Camera said there were “several favourable elements” that could hasten the transition to a clean energy system. The economies responsible for more than half of the world’s global carbon emissions have pledged to become carbon neutral by 2050, financial markets and investors are turning towards sustainable investments, and Covid-19 has demonstrated the risks in tethering economies to the financial fate of fossil fuels, he said.
“As governments pump huge sums in bailouts and recovery, investment must support energy transition. It is time to act and countries can lead the way with policies for a climate-safe, prosperous and just energy system fit for the 21st century,” La Camera said.
15 March 2021