A new global report has found persistent obstacles are preventing renewables from keeping pace with rising energy demand, leading to an increase in greenhouse gas emissions.
The findings of REN21’s Global Overview of the Renewables 2024 Global Status Report (GSR 2024), come as the study also found policy responses to geopolitical developments and global commitments accelerated the deployment and use of renewable energy in 2023, especially in the power sector.
The historic decision at the COP28 summit to triple renewable energy capacity and double annual energy efficiency improvements by 2030 further raised ambition and built momentum for renewables, stated the research.
Growing leadership and appetite for renewables in developing countries is clear, but finance remains a major obstacle, it found.
Renewables are increasing in the overall energy mix, but they are not replacing coal, oil and gas at the required pace for various reasons: the overall demand for energy is rising fast, renewable energy projects are significantly more expensive in developing countries and large bottlenecks persist in permitting, infrastructure and connecting renewables to grids.
This is the main message of the GSR 2024 report released today.
As the first module in a series to be unveiled during the year, the Global Overview provides the big picture status of renewables in the wider energy system and in the context of global challenges such as climate change, economic development and the geopolitical landscape.
“The world is burning more fossil fuels than ever before, global energy-related emissions are increasing, and ever-growing energy demand is not being fully met by renewables,” said REN21 executive director Rana Adib (pictured).
“This is aggravating the climate crisis and derailing the energy transition. We are missing the opportunity to build resilient and inclusive societies by fully deploying the economic opportunities that renewables provide.
“We must also make rapid gains in energy efficiency to make best use of the energy we consume.”
Renewable energy use surged 58% between 2012 and 2022, but overall energy demand also grew 16% during this period, said the report. The increase in demand has been met mostly by coal, oil, and fossil gas, which together accounted for around 65% of energy consumption growth between 2012 and 2022.
Policy responses to curb energy insecurity and inflation have proven effective in reshaping the renewable energy landscape and boosting investments and projects, found the study.
The US Inflation Reduction Act and the RePowerEU plan have diversified supply chains, taking the first steps towards reduced reliance on a handful of manufacturing countries and greater energy independence, the report found.
“The COP28 decision was a big win but would have been even bigger if it targeted the entire energy system, and not just the electricity system,” said senior officer at Climate Action Network International Janet Milongo.
“It also missed an opportunity to highlight finance as a foundational ingredient for its success. There is a critical and urgent need for a complete system-wide and sufficiently funded shift to renewable energy, to create just, equitable, resilient and prosperous societies and economies.”
The GSR 2024 Global Overview shows despite improvements, the gap between current and required renewable energy investments is still significant.
Global investment in renewable power and fuels increased 8.1% in 2023 to reach around $623bn. However, BloombergNEF and the International Renewable Energy Agency estimate $1300bn to $1350bn are needed annually to achieve the goals set at COP 28 and in the 2015 Paris Agreement.
The global financial landscape continues to put low-income countries at a significant disadvantage, with the cost of capital for renewable energy projects reaching as high as 10%, compared with less than 4% in high-income countries, according to the report.
Instead of supporting developing countries’ efforts to leapfrog fossil fuels and establish renewables-based economies, the report said this situation exacerbates inequality and prevents these countries from benefitting from the huge opportunities presented by renewables – not only to address energy access, but also to drive economic and industrial development.
The study underscores the structural issues impeding the pipeline of renewable energy projects globally. Worldwide, an estimated 3000GW of renewable energy projects remained underdeveloped as of 2023 due to inadequate grid infrastructure, insufficient financing, and permitting delays. These are major bottlenecks that risk derailing the energy transition.
“Electricity grids have been ignored far too long. Their enabling role to integrate renewable energy sources needs to be acknowledged in every country,” said Renewables-Grid Initiative (RGI) chief executive Antonella Battaglini.
“We need to remove bottlenecks to electricity grid deployment. Building grids in harmony with nature and with people’s support is completely possible. We at the RGI demonstrate this continuously through our activities.
Adib added: “Renewable energy is our best bet for quick energy generation that unlocks concrete social and economic benefits and boosts support for this technology.
“But lack of access to finance and high capital costs are penalising developing countries and preventing millions of people from achieving social and economic progress.
“The COP28 decision is not enough – it must be reflected in our actions. We must refocus our energy planning to place renewables at the centre.
“We must be more ambitious, build stronger policies, and ensure an equitable distribution of financial investments, technology and skill sharing to ensure a rapid global energy transition that puts people first.”