A green recovery from the COVID-19 pandemic would have helped countries to build back better while driving economic growth and job creation. But the latest Renewables 2022 Global Status Report paints a different picture. According to the report, the global energy transition the world had hoped for is simply not happening.
The rebound in economic activity we experienced led to a four per cent increase in global energy demand, which was met mainly by fossil fuels and was further compounded by the spike in energy prices following the war in Ukraine.
The greatest success for renewables in 2021 was indeed in the power sector but the report finds that we do not use enough renewables to heat and cool our homes. Meanwhile, the industry sector is the largest energy user, accounting for more than a third of global final energy demand, whilst progress in the transport sector remains slow.
We sat down with Niklas Hagelberg, Coordinator on Climate Change at the United Nations Environment Programme (UNEP), to find out more about the global energy crisis and what can be done to transition to an energy-efficient economy.
This year’s report sends a clear warning that the global energy transition is not happening. What can countries, companies and other stakeholders do to speed up the transition?
Niklas Hagelberg (NH): Indeed, it is alarming that even in the energy sector, which has cost-effective solutions, we haven’t yet seen a drop in emissions. To speed up the transition, every household and company needs to shift to renewable energy, thermal heating and cooling districts, and low carbon transport modes. But this cannot happen at the required speed if governments are not making it easier to rapidly install renewable energy production, secure connection to the grid and promote its use. Permitting processes must be reduced drastically. We also need direct support for the shift in heating and cooling and the energy that supports the transport sector. Lowering public transportation tariffs, as Deutsche Bahn has done for the summer months, is an example where we can avert emissions in mobility almost completely.
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What are the risks of delaying the energy transition?
NH: Energy connects in one way or another to some 70 per cent of global emissions, and a shift to low carbon energy forms is critical. We cannot keep the Paris Agreement temperature goals alive without a rapid energy transition. Political commitments, national strategies and legislation are all crucial to the transition. But in the end, it boils down to the real emissions, which need to peak immediately. And the longer we delay the transition, the higher the cost of loss and damage will be to society, companies, individuals, and governments.
The report found that renewable power and fuel investment rose for the fourth consecutive year, reaching 366 billion US dollars. And a record increase in global electricity generation led to solar and wind power providing more than 10 per cent of the world’s electricity for the first time ever. These sound like impressive achievements. Yet, why is the renewable energy transition still not on track?
NH: It does sound great. And renewable power installations continued to attract far more investment than fossil fuel or nuclear generating plants, with renewables accounting for 69 per cent of the total amount committed to new power generating capacity in 2021. So we should take a moment to savour this progress.
However, this progress is insufficient and has not matched the growth in overall global energy demand. To get back on track, we need to increase the energy transition pace three-fold. A key reason why the transition is not occurring as needed is the ongoing subsidizing of fossil fuels. Between 2018 and 2020, governments spent 18 trillion US dollars– 7 per cent of global GDP in 2020 – on fossil fuel subsidies, in some cases while reducing support for renewables. We don’t need to remove these subsidies from the energy sector but we do need to move towards renewable energy and support the transition.
Which industries do you think could have the greatest impact by transitioning to more renewable energy sources?
NH: All of them! By 2030 we need to halve our emissions, which means all industries that use energy to heat, cool and light their facilities and manufacture and transport their products need to take action. To give one example of the scale of the transition is needed, we are on track to add more than 1 billion cars by 2050 almost all of which will be in low- and middle-income countries.
To ensure that these do not add emissions, biking, walking, public transport, and switching to electric vehicles must be supported.
Source: UNEP
