In anticipation of the forthcoming COP28 summit, the COP28 Presidency, the International Renewable Energy Agency (IRENA), and the Global Renewables Alliance (GRA) have jointly released a report titled ‘Tripling Renewable Power and Doubling Energy Efficiency by 2030'. The report underscores the urgent need to triple global renewable installations by 2030 and expand solar capacity to 5.4 terawatts (TW) by the decade's end to limit global warming to 1.5 degrees Celsius.
This report echoes similar sentiments conveyed by the International Energy Agency in a separate publication last week, which projected solar photovoltaic (PV) to account for more than half of new global power capacity installations in the next decade. The collaboration between the COP28 Presidency, IRENA, and GRA is seen as an encouraging development for the global solar industry.
According to the GRA and IRENA report, the forecast for global solar capacity growth is from 1.1 TW in 2022 to 5.4 TW by 2030. Solar power is anticipated to constitute the largest portion of all renewable power sources, surpassing onshore wind capacity, which is projected to reach 3 TW. Overall, the report envisions renewables contributing 77% to the global energy mix by 2030, highlighting the significant role solar power will play in both the renewables mix and the broader energy landscape.
The report also notes that the majority of this additional capacity is expected to be installed in G20 countries, while the rest of the world is forecasted to add approximately 900 gigawatts (GW) of new capacity by the end of the decade. Notable examples of such efforts include the 2.4 GW Mohammed bin Rashid Al Maktoum solar park in the UAE and Masdar's plan to install 1 GW of new renewables capacity in Azerbaijan, showcasing the transformative potential of the clean energy transition in the global energy industry.
IRENA's Director-General, Francesco La Camera, emphasized the necessity of building essential infrastructure, investing in grids to accommodate growing renewable energy, and establishing policy and regulatory frameworks that facilitate targeted public and private sector investments to support the energy transition.
However, achieving these ambitious solar targets will require substantial investments. The report estimates that the world will need to invest $2.9 trillion in the solar PV sector over the next decade. This amount represents more than one-quarter of the $10.4 trillion required for new renewable power capacity and approximately one-tenth of the $29.5 trillion necessary for grid infrastructure and energy efficiency improvements to meet the outlined goals.
Importantly, the solar sector benefits from falling levelized costs of electricity (LCOE), which have decreased more significantly than in other renewable energy forms. Solar LCOE has reduced from being 710% higher than the lowest-cost fossil fuel in 2010 to being 29% lower than the lowest-cost fossil fuel in 2022. This substantial decrease positions solar power as a promising investment opportunity. Consultancy firm DNV expects solar LCOE to decline by 48.8% by 2050, further increasing the appeal of investing in the solar sector.
The report also underscores the importance of financial support for renewable projects to incentivize companies to scale up investments in solar power. Initiatives such as the Climate Bonds Initiative and programs like the Just Energy Transition Partnerships are highlighted as critical in encouraging sustained investment in the solar sector.
Notably, the solar sector relies heavily on private investment, with 83% of investments in solar PV coming from private financing in 2020, as per an IRENA report from June. To attract continued private investment, solar projects must offer compelling financial prospects.
The GRA CEO, Bruce Douglas, emphasized the necessity for global leaders to commit to the outlined targets at COP28. He also stressed the importance of close collaboration between policymakers, industry stakeholders, and civil society to implement the enabling actions detailed in the report, encompassing infrastructure, policy and regulation, supply chains, skills, and capacities.