World Energy Transitions Outlook 2023 (IRENA)

Our key takeaway: We need annual investment in energy transition technologies to quadruple to meet the 1.5°C limit - according to the International Renewable Energy Agency (IRENA). We also need significant acceleration across all energy sectors towards renewable energy and energy efficiency. Bold and transformative action to accelerate the energy transition is needed now - and of course, we need people to be driving this transition, with the benefits shared equally.

IRENA released its report World Energy Transitions Outlook 2023 (March 2023):

• The scale-up of renewable energy and efficiency solutions is critical to limit temperature rise to 1.5°C, but we are currently off-track to meet this: One of the report’s key messages is that shifting away from fossil fuels to renewable energy is necessary and the “only realistic option available” to limit global temperature rise to 1.5°C. However, global investment in energy transition technologies is currently falling short despite reaching record highs: “Although global investment across all energy transition technologies reached a record high of USD 1.3 trillion in 2022, annual investment must more than quadruple to remain on the 1.5°C pathway.” Crucially, stalling action now will only increase the difficulty of transitioning to renewable energy systems, and the financial investment needed to support it: “Delays only add to the already considerable challenge of meeting IPCC-defined emission reduction levels in 2030 and 2050 for a 1.5°C trajectory…[t]he lack of progress will also increase future investment needs and the costs of worsening climate change effects.”

• “The energy transition can support a move toward a more resilient and equitable world”: The report highlights key pillars of a sustainable and fair energy transition: (1) “Physical infrastructure upgrades, modernisation and expansion will increase resilience and build flexibility for a diversified and interconnected energy system”; (2) “Policy and regulatory enablers must systematically prioritise the acceleration of the energy transition and a reduction in the role of fossil fuels”; and (3) “A well-skilled workforce is a lynchpin of a successful energy transition.” The report further highlights how effective stakeholder engagement is critical to a resilient and equitable energy transition. For instance, “ensuring that communities are well informed of, and able to exercise, their rights as critical transition stakeholders, and to harness its benefits” is key to building capacity among institutions, communities, and individuals to drive the energy transition. Similarly, any physical infrastructure upgrades and expansion will need to be “secured through project transparency and opportunities for communities to voice their perspective.” All this is to say that a successful energy transition requires the support and participation of people at its core.

• Short-term measures that can be taken now to accelerate the renewable energy transition: The report sets out key measures that can be carried out now to accelerate the energy transition, and which can be largely grouped into eight categories: Ambition; Institutions; Physical infrastructure; Jobs and skills; Finance; Power sector; End-use sectors – buildings, industry, transport; and Cross-sector and cross-cutting policies. Some key measures that are particularly pertinent to the private sector are: (1) “Set ambitious renewable energy targets and energy efficiency targets in all end uses (electricity, heating and cooling, transport)”; (2) “Streamline permitting procedures for large-scale infrastructure without compromising environmental and social impact assessments and ensure public acceptance is fostered”; (3) “Develop pathways for fossil fuel industry workers to retrain and recertify for careers in renewable energy”; (4) “Ensure better access to training opportunities for women, youth and minorities”; (5) “Define ‘risk’ in a more comprehensive way that goes beyond investor-centric definition of risk…to include broader environmental and social risks”; (6) “Incentivise/mandate a circular economy approach”; and (7) “Put greater focus (Including through international collaboration) on achieving the universal access targets of SDG7”, which is “ensur[ing] access to affordable, reliable, sustainable and modern energy for all” by 2030. The report makes it abundantly clear that the energy transition needs to factor in human rights risks and opportunities and that these are all actions we could be implementing now to support the move away from fossil fuels and towards the 1.5°C temperature limit set by the IPCC.