From pv magazine 12/2021
The 26th Conference of the Parties (COP26) to the UNFCCC undoubtedly represents a global shift toward sustainability. Not only did the summit acknowledge the critical role of nature in climate action and the importance of acting on deforestation, but agreements were also reached to address non-CO2 emissions such as methane. Perhaps most importantly – despite significant argument – the need to move away from fossil fuels (starting with coal) was, for the first time, enshrined in a climate agreement.
The 2021 UNEP Production Gap Report warned that governments currently plan to produce more than twice the amount of fossil fuels in 2030 than is consistent with limiting warming to 1.5 C. The gap between commitments and the action needed remains high, but while the final language may have been toned down from the “phase-out” of coal to “phase-down,” given that it has taken 26 years of arguing to get something so necessary made official, it remains an achievement.
COP26 saw more than 40 countries – including major fossil fuel users Poland and Vietnam – promise to end all investments in new coal power generation and scale up the deployment of clean power technologies. It was also agreed that emissions plans would be revisited next year instead of in five years, which opens the door to further action in short order.
Agreement on the rules around international carbon markets also moved forward. Richard Cockburn, head of energy at law firm Womble Bond Dickinson, said that “COP26 has been important for the signals which it sends to governments and markets around the world. In this light, investors are under no illusion that the future lies in low-carbon and zero-carbon energy technologies and widespread carbon pricing now looms closer. The climate summit may not have provided the concrete and immediate action demanded by so many but it seems to have set a floor for a pathway unlikely to be overturned.”
And consensus on action is accelerating. Thirty-three new countries announced net zero targets at COP26, which may not yet put the world on a path to emissions reduction of 45% by 2030, but has proved that net zero is now mainstream.
The impact these agreements have on trillions of dollars in private finance could accelerate a low-carbon future. There are several net zero alliances across asset managers, insurers, banks and pension funds, but at COP26, the Glasgow Finance Alliance for Net Zero (GFANZ) announced that signatories with $130 trillion of assets under management have committed to a net zero future – an increase of 25 times in the last couple of years. GFANZ states that these commitments from more than 450 companies across 45 countries can deliver the estimated $100 trillion needed over the next three decades to reach net zero.
“The speed of the global net zero transition cannot be realized without an equally ambitious implementation agenda,” said Julian Havers, E3G’s lead on public banks. “In support of acceleration, Johnson, Biden and Von der Leyen put forward a new paradigm of sustainability finance – spanning both public and private investments – to mobilize the trillions needed to keep 1.5 degrees within reach. Moving out of Glasgow and into 2022, the political stage is set for changes in the ways clean investment projects … [are] financed.”
Move to clean
One of the most obvious actions any investor can undertake is to refocus their investments away from fossil fuels and toward clean energy. There is a huge gap to be filled, with IEA and IRENA roadmaps showing solar and wind contributing 70% of generation by 2050. It’s going to be a challenge – a joint study by the Global Solar Council and the Global Wind Energy Council estimates that by 2030, there will be a 29% shortfall in the projected wind and solar capacity required to keep the world on course for 1.5 C. Their concern is such that they have established the Global Renewable Energy Alliance to drive the policies necessary to fill that gap and support industry in integrating solar throughout the value chain.
“The goal is to promote the value chain from the supply chain to customers and end users and involves many leading global corporates which are taking radical sustainability approaches,” said Global Solar Council CEO Gianni Chianetta.
Benedikt Ortmann, global director of solar projects at BayWa r.e., believes that solar and wind can achieve 45% decarbonization by 2030 if the right elements are put in place.
“We must see targets at national level supported by enabling policy and similar commitments ‘on the ground’, and thereby ensure projects of both wind and solar can be realized at much greater pace,” Ortmann said.
The Glasgow Breakthrough Agenda also recognized the need for urgent action, and while its focus is on new technological approaches, it too demands the deployment of clean energy. Representing 70% of the global economy, the intention is to replicate the cost curve achieved by solar in more immature technologies in power, road transport, steel, hydrogen, and agriculture. One of the first projects announced under its auspices is the UK-India led “Green Grids Initiative – One Sun One World One Grid” (GGI-OSOWOG) to build off-grid power, mini-grids and connect international grids to enable higher use of renewable energy.
The reality is that today’s technologies allow the rapid reduction of emissions if political will and finance combine. “For governments looking to show they are acting now to raise their climate ambition and accelerate their NDCs, solar PV and wind are go-to technologies that are economically competitive and reliable today,” said Chianetta.
The economic potential is also huge. Bertrand Piccard, chairman of the Solar Impulse Foundation, said that there are thousands of potential solutions for policymakers. “Raising ambitions does not represent an unmanageable risk, but rather an economic opportunity to be taken with audacity,” he said. “The good news is that the technologies exist and they are just waiting to be implemented.”
There is a role for new solar technologies, too. This means sector coupling, new processes, and techniques, for example the use of solar in e-mobility.
“We need e-mobility PV solutions that can be manufactured at scale using automated manufacturing processes rolling off gigawatts of PV,” said Power Roll CEO Neil Spann. “And we also need solutions that can be manufactured anywhere in the world using materials that are abundant and easily accessible, produced in the same regions where they are consumed: in Thailand for tuk-tuks and in Glasgow for the shipping industry. Anywhere and everywhere.”
By Felicia Jackson
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