US$550 billion of investment is needed every year till 2030 to secure the transition to sustainable energy and to keep below a 2°C rise in global temperatures, according to Adnan Amin, director general of the International Renewable Energy Agency (IRENA).
“We need to double the level of investment that we are seeing today to significantly scale-up renewable energy and reduce carbon emissions to an acceptable level,” said Amin at the Renewable Energy Financing Forum's (REFF) Wall Street event in New York last week.
Investment would also increase energy efficiency and see renewables account for 36% of the globe’s energy, he said.
“This level of investment together with energy efficiency measures will help mitigate the catastrophic impact of climate change,” said Amin.
IRENA said most of the investment is to go towards solar, wind and hydropower, creating nearly a million jobs by 2030.
“The emerging challenge we are facing today is financing renewable energy technologies in the end use sector. This is crucial to make the renewable energy transition complete,” said Amin.
The investment would also save US$80-200 billion a year in health related costs, according to IRENA’s estimates.
At the beginning of June IRENA released its Renewable Energy Map (RE map) stating global solar deployment needs to increase by a factor of 12 and calculated the switch to renewables will also provides US$740 billion of savings each year on environmental costs from burning fossil fuels – cancelling out the investments costs required to reach 36% renewables.
On the release of the REmap Dolf Gielen, director of IRENA’s innovation and technology centre said, the world is “not on that path” to increasing renewables yet.
“All governments need to step up their efforts. We need to act now,” said Gielen.
The latest IPCC report states: “Additional investments required in the energy supply sector by 2050 are estimated to be US$190 billion to US$900 billion a year to limit the temperature increase below 2°C.”
The IPCC report also cited examples of renewables employment from Germany and Spain as “noteworthy where 500,000 to 600,000 people could be employed in the renewable energy supply sector in each country by 2030”.
Already this year, the European Investment Bank is to provide US$1 billion to support renewable energy development, US$219 million has been invested in the Danish Climate Investment Fund (DCIF) from various pension funds, and US$8.4 billion is to be invested in renewables from Norway, via its oil-generated sovereign wealth fund, Government Pension Fund Global (GPFG).
IRENA consists of 130 states and the European Union for cooperation in renewable energy.