An accelerated energy transitionMarch 15, 2021
Francesco La Camera, director-general of the International Renewable Energy Agency (IRENA), talks to The Energy Year about the organisation’s initiatives and impact in advancing renewable energy projects worldwide. Headquartered in Abu Dhabi, IRENA is a 163-member intergovernmental organisation supporting countries in their transition to a sustainable energy future.
What impact has the Covid-19 pandemic had on the development of renewable energy projects?
The renewable energy sector is less impacted by the Covid-19 pandemic than traditional energy sources. The data suggests renewable energy investments were strong in 2020.
The growing share of renewables in countries worldwide proves that they are the most convenient and resilient source of energy production. This trend has accelerated the energy transition. We also see this reflected in the stock market, with multiple renewable energy companies increasing their value significantly.
To summarise, Covid-19 has highlighted the importance of the energy transition worldwide. As we look to recover, it is very important for governments and international institutions to spread this message and understand that the short-term response to the pandemic must be connected to the medium- and long-term objectives of the sustainable development agenda and the Paris Agreement.
What do you see as takeaways of the latest IRENA assembly, held in January?
The 11th IRENA Assembly was our first important global gathering of the year, and all 163 members showed not only their commitment to the energy transition and the Paris Agreement, but their ambitions and willingness to strengthen their existing energy and business models. All of them are fully committed to raising the bar in the coming years, starting with this very important year of COP26.
What have been IRENA’s key achievements over the past year?
Under the constraints of the pandemic, we published an important report concerning the post-Covid agenda, the Post-Covid Recovery: An Agenda for Resilience, Development and Equality. This report serves as a roadmap to sustainable recovery for policymakers as they navigate out of the economic crisis caused by the pandemic towards a more stable and sustainable growth model.
We also developed five collaborative frameworks – platforms for public-private discussion and co-operation – around key issues and topics relative to the energy transition, such as the geopolitics of energy transformation, hydropower, green hydrogen, integration of higher shares of renewables in energy systems and ocean energy technologies. These meetings take place at a ministerial level and serve as important platforms for facilitation and knowledge exchange.
IRENA is recognised by the UN for the leading role that we play worldwide given our global membership. In light of this, the UN secretary-general has given IRENA the task of co-leading a working group on the energy transition as part of the next General Assembly, to be held in New York in September. This will be the General Assembly’s first High-level Dialogue on Energy in 40 years and takes place at an important moment in global development.
How do you assess the results of IRENA’s work in supporting project financing?
We have received appreciation from our membership for the work we are doing on the Climate Investment Platform, established on the sidelines of the 2019 UN Climate Action Summit. This joint initiative between IRENA, UNDP and SEforAll, and in collaboration with the Green Climate Fund, will simplify the climate finance landscape and provide integrated and streamlined support to developing countries, emerging economies and the private sector.
Now we are starting to witness the initial results of our initiative. As of today, we have around 300 partners including the biggest financial institutions, companies and development agencies in the sector who will support our efforts in mobilising capital. Currently, we are working on more than 20 projects worldwide, and we are constantly adding new projects through our digital platform. We are also working closely with countries to make sure that these projects are bankable.
This work builds on the experience we have gained through our strong partnership with the Abu Dhabi Fund for Development (ADFD) under the IRENA/ADFD Project Facility, which will finance 32 projects in developing countries across seven funding cycles. We look forward to building on these achievements with similar strategic partnerships in the future.
Ahead of the upcoming COP26 in Glasgow, what are your expectations in terms of commitment by the states?
There is no doubt that it will be a crucial COP meeting. We have moved beyond the negotiation phase of the agreement and into the implementation and action phase. COP26 can be successful if ambitions within the Nationally Determined Contributions (NDCs) are raised.
IRENA has made it clear that the commitments presented in Paris were not enough. Now a goal in line with the findings of the 2019 IPCC Special Report on Global Warming of 1.5°C is critical if we are to control the rise of temperatures to below 1.5 degrees Celsius. To achieve this, the bar needs to be raised in terms of country-level ambition. If the commitment of the members is in line with this pathway, COP26 will be a success for sure.
What role can oil and gas companies play in unlocking the potential of renewables?
There is no doubt that they will play a crucial role. At IRENA, we are engaging more and more closely with the traditional energy community. Recently, for example, I met with the Oil and Gas Climate Initiative chairman and former BP chief executive Bob Dudley to discuss the energy transition pathways to accelerate the move towards a low-carbon energy system. The oil and gas community’s investments in renewables are low, but they are growing and should accelerate further. Their role is fundamental.
What’s your message to investors in the energy industry?
To achieve a net-zero future, sectors such as transportation and heavy industry will rely heavily on renewable fuels. Therefore, we believe that hydrogen and bioenergy will play a significant role by 2050. We already see growing investor and government appetite for a share of these markets. The faster investors go in that direction, the more profits they can make and the more chances they will have to stay in the market.