Towards an energy system centred on renewables

UAE

Francesco La Camera, director-general of IRENA, talks to The Energy Year about setting priorities to accelerate global progress towards energy transition and the need for policies to incentivise hydrogen offtake. IRENA is a 170-member intergovernmental organisation supporting countries in their transition to sustainable energy.

What was IRENA’s role in shaping the UAE Consensus?
IRENA’s World Energy Transitions Outlook (WETO) provided the analytical basis for the renewable energy target included in the UAE Consensus. The modelling in WETO identified the most cost-effective pathway for the energy transition to align with the IPCC’s recommendations, which call for a 43% reduction in emissions by 2030 to limit global warming to 1.5 degrees Celsius. Achieving this requires global installed renewable power capacity to grow from around 3.8 TW today to 11.2 TW by 2030.

What is your assessment of the current status of the energy transition?
In 2024, a record 473 GW of renewable power capacity was added globally. That is an incredible step – 30% more than in 2023 – but the fact is that it is less than half of what is needed. We need to change gears.
We are moving towards a new energy system that will largely be dominated by renewables, complemented by green hydrogen and the sustainable use of biomass. However, the speed and the scale of this process are under scrutiny, and they will depend on the capacity of governments to push for change. The market can bring us where we want to go, but we need policies that can accelerate our progress.

How is the Middle East, and the UAE in particular, performing within this analysis?
In 2023, the Middle East recorded the second-fastest growth rate in renewable power capacity globally, expanding by 17.5%, second only to Asia. However, renewables still only make up just 9.9% of the region’s total electricity capacity, highlighting the need for continued efforts to scale up clean energy. The region’s strong momentum reflects a growing commitment to renewables, but accelerating the transition requires scaling finance, advancing infrastructure and strengthening policy frameworks.
Within this broader trend, the GCC countries are moving fast, with the UAE at the regional forefront. The UAE’s renewable power capacity has more than tripled since 2009, reaching 6.0 GW in 2023 – the largest share of new renewable capacity in the GCC. The UAE also accounts for 56% of the total installed renewable capacity in the GCC, the highest in the region.
Additionally, the UAE reported the highest renewable energy share of total power capacity in the GCC at 13.8%. The country, along with other Gulf nations, is investing heavily in solar and green hydrogen while expanding its renewable investments abroad.

What are the key priorities that can accelerate the world’s progress towards energy transition?
We say that renewables are the most convenient way to produce electricity and that they cost less than other sources. Decentralised sources of energy are the cleanest and most secure. Although we have experienced extraordinary progress, we need to ask ourselves how to proceed faster. The main areas that need attention are infrastructure, the legal environment, market design and building the appropriate skills and capacities in our workforce.
For instance, the infrastructures that exist today have been built to serve a centralised system that is based on fossil fuels. They should evolve to serve the new energy system with grids becoming more interconnected, flexible and balanced. We need storage. We need more actors that are capable of trading ammonia or hydrogen.
Another consideration is that the market is still designed for fossil fuels. There are subsidies for fossil fuels and trade tariffs – the market is based on marginal costs, which benefits fossil fuels, and not on long-term contracts that are favourable for renewables.
The third barrier is institutions and professions. Managing a centralised energy system is different from managing a decentralised one. The latter is surely better, but it is more complex to manage. Professionals that come from traditional energy sectors to renewables need to be re-skilled and retrained.

Can you discuss some key projects that IRENA is currently working on?
IRENA’s Energy Transition Accelerator Financing Platform includes 14 partners, including the Asian Infrastructure Investment Bank, the Abu Dhabi Fund for Development, the Islamic Development Bank and the European Bank for Reconstruction and Development, among others. Working together, we have been able to build a robust project pipeline and realise a very important solar power project in Uzbekistan consisting of 200 MW in two different locations.
Additionally, we launched the Utilities for Net Zero Alliance (UNEZA) with Masdar and TAQA. Because infrastructure is one of the barriers to the development of renewables and utilities are the ones in charge of the transmission of molecules and electrons, we launched UNEZA to address the impediments on our net-zero path. Following its successful launch, we now work with close to 50 utilities around the world working to address those challenges globally and regionally.

What role can technology play in accelerating the energy transition?
AI will be immensely relevant. It is the way to do things better. Digitalisation and AI will be very important for adding efficiency to industrial processes. Also, AI can be valuable for managing networks and the transmission of molecules and electrons in the energy system, facilitating the management of infrastructure at the same time.
Naturally, AI will need energy to run, and that energy must come from renewables. We have to ensure that everybody can harness the benefits of AI in the energy transition, including the Global South.

How do you see the role of hydrogen evolving in the global energy mix?
What hydrogen is missing today is demand. We need policies to make it more attractive. It is still more expensive than other ways to avoid carbon dioxide, but costs are coming down. Companies are already providing capital to develop hydrogen, but we need policies on the demand side of the equation, especially in the EU.
To utilise existing pipelines or build new ones, we need a substantial increase in demand. Offtake is very important. If we incentivise hydrogen, just as renewables were incentivised 10 years ago, I am confident that the results will be excellent.

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