The most important announcements of COP28 are to triple renewable power capacity by 2030 and transition away from fossil fuels. These unprecedented ambitions need to feed into the transition plans of corporates and investors. Only in this way can we expect a disruptive change towards lower emissions and clean energy
COP meetings often end with high-level declarations of action which, if fully implemented, would benefit the climate. But what these declarations mean for companies and investors is often less clear. We highlight the top five outcomes of COP28 that will show up in the boardrooms of corporates and investors.
Tripling renewable capacity by 2030 requires grid-wide reforms
Countries at COP28 have agreed to triple global renewable power capacity by 2030. This means that renewable capacity worldwide needs to increase from 3,600 GW in 2022 to over 11,000 GW in 2030. Tripling renewable power capacity by 2030 is one of the pillars of the International Energy Agency’s (IEA’s) Net-Zero Emissions scenario, as it would contribute to roughly a third of the emissions reduction needed to keep global warming within the 1.5 degree Celsius increase compared to pre-industrial levels.
The IEA estimates that the world is likely to have 4,500 GW of renewable capacity by the end of 2024, up from about 3,600 GW in 2022. Under this estimate, global renewable capacity would need to increase annually by 16% between 2024 and 2030 to achieve the target, up from the 9% annual increase estimated between 2010 and 2024.SSS
Renewable capacity needs to accelerate to a growth rate of 16% year on year
Global renewable power capacity in gigawatt
That is a substantial uptake, though not unachievable. To reach the target, there needs to be a disruptive reform of the power system. This includes upgrading transmission lines, fast-tracking permitting processes, enhancing storage capacity, and addressing the problem of labour shortages through re-training programmes.
These are not easy problems to solve, but governments are beginning to pay more attention to them. For instance, governments in both the US and EU have allocated funding to upgrade transmission lines and are also making initial efforts to reform the project permitting processes.
For all the latest on what COP28 will bring for corporates and investors, catch the full report here.