Post-pandemic recovery promises green energy opportunities

International renewables agency Irena is recommending to link post-pandemic economic recovery programs to medium- and long-term energy transition priorities in Latin America and the Caribbean (LAC).

In its first global renewables report, released Monday, Irena's director-general, Francesco La Camera, wrote, “COVID-19 does not change the existential path required to decarbonize our societies and meet sustainability goals. By accelerating renewables and making the energy transition an integral part of the wider recovery, governments can achieve multiple economic and social objectives in the pursuit of a resilient future that leaves nobody behind.” 

He added that goals set in the UN's 2030 agenda and the Paris Agreement “can serve as a compass” with nationally determined contributions (NDCs), to be presented by year-end under the Paris Agreement, “serving as the backbone of every nation’s stimulus package.” 

La Camera said, “stimulus and recovery packages should accelerate the shift to sustainable, decarbonized economies and resilient inclusive societies,” adding that while the current oil and gas price volatility “undermines” investment, it makes “the business case for renewables even stronger.”

For each region examined, the outlook detailed one dataset based on a planned energy scenario (PES), built on current national policies, and one dataset based on a transforming energy scenario (TES), with “ambitious, but realistic” goals that target a 1.5˚C increase in global temperatures.

According to the report, the LAC region (excluding Mexico as part of North America) features broad resource diversification and “enormous untapped potential,” with estimated total power generation of 3,138TWh, representing 6% of overall power potential.

HOW BIG A BOOM?

Renewable installed capacity is set to boom in the region, rising from the 214GW capacity Irena recorded in 2017 - including bioenergy, hydro, solar PV, wind - to 376GW by 2030.

Under the PES scenario, wind and solar PV will rise most dramatically, from 17GW to 74GW and from 5GW to 76GW, respectively. And total renewables capacity would reach 630GW by 2050.

Under the more ambitious TES scenario capacity would hit 803GW, with 281GW in solar PV and 188GW in wind. 

SOURCE: Irena Global Renewables Outlook 2020

EFFICIENCY

Energy usage in the LAC, according to Irena, should be contained with improved infrastructure and efficiency regulation, including region-wide policy coordination to lower system costs, foment distributed power for isolated communities, and promote clean cooking technologies over traditional ones such as wood-burning.

Under PES, regional energy supply would rise from 27EJ (exajoules) in 2017 to 46EJ in 2050, and to 31EJ under the TES framework. Consumption would increase from 21EJ to 34EJ under PES. Under TES, consumption would be 21EJ in 2050, but 22EJ in 2030 and 2040.

SOURCE: Irena Global Renewables Outlook 2020

Renewables supplied 30% of electricity needs in 2017, according to the report, reaching 40% by 2030 and 46% by 2050 under PES. The ambitious TES scheme could lead to a rise to 53% by 2030 and 73% by 2050, as renewable power generation would reach 79% by 2050 under PES and 93% under TES.

2018 Energy project lifetime break-even costs (LCOE). SOURCE: Irena Global Renewables Outlook 2020 

INVESTMENT

To reach the TES goals, annual renewables investments through 2050 must reach US$28bn instead of the US$21bn currently projected, and must be flanked by long-term government commitments.

SOURCE: Irena Global Renewables Outlook 2020 

Irena's La Camera wrote, “the nature of this crisis calls for a major state role in the response” that must be “more than just a bail-out for existing socio-economic structures.” 

Recovery measures, he suggested, could help to install flexible power grids, efficiency solutions, electric vehicle (EV) charging systems, energy storage, interconnected hydropower, green hydrogen and other clean energy technologies.  

“With the need for energy decarbonization unchanged, such investments can safeguard against shortsighted decisions and greater accumulation of stranded assets,” wrote La Camera, warning against investments and policies that lock in fossil-fuel emissions “for decades to come.”