The costs of adopting clean power technologies continues to fall but investment levels must rise to meet climate targets and support COVID-19 recovery plans.
These are some of the findings of a major report published last week by the United Nations. The analysis compares companies and countries investment pledges for renewable energy for the next decade as well as investment trends in the renewable sector in 2019 and uncovers some disappointing figures.
Globally, there has been commitments to build 826GW of renewable energy capacity by 2030 which would cost about $1 trillion.
That’s $1.7 trillion less than the world spent on renewables in the 2010s, and unfortunately, that planned investment isn’t nearly enough to meet the goals of the Paris Agreement and keep the Earth’s warming below 2 degrees Celsius.
Doing so would require an additional 3,000GW of renewable power by the end of the decade. The world needs to commit to spending trillions more dollars by the end of the decade just to avoid crossing 2 degrees Celsius - and it would be far preferable to stay below 1.5 degrees, which requires even more investment.
The good news is that thanks to improvements in efficiency and various market forces, the cost of installing sustainable energy is decreasing. The report estimates that two-thirds of the world’s population now live in countries where either solar or wind is the cheapest electricity option and prices are likely to keep falling.
The world added 184GW of clean energy capacity—the largest annual addition ever—in 2019. That’s 12% more sustainable energy than the world added in 2018, but the researchers estimate it cost just 1% more. That makes current investments in clean energy can get more bang for the buck than ever.
The cost of clean energy had been on the decline long before 2019, but the report shows that it’s recently been falling more steeply.
In the past 10 years, the cost of onshore wind energy decreased by 49% —10% of which happened between 2018 and 2019 alone. Even more notably, onshore wind prices dropped by 51% from 2009 to 2019, and 32% of that dip has occurred since 2018. Solar has fallen even further, with installation costs falling 83% in the past decade.
Meanwhile amid the coronavirus pandemic, the fossil fuel sector has reached a crisis point. Demand for coal- and gas-fired electricity has dropped dramatically, and the price of oil hit an almost absurd all-time low.
Though it’s slightly recovered, it’s still in a slump. These industries weren’t doing well even before the crisis began, so even from a purely economic standpoint, throwing them a lifeline makes no sense.
If we’re going to avert catastrophic climate breakdown and long-term economic peril, we have no choice but to make the transition away from fossil fuels. With economies hurting and the need for a transition clear, now is the time to invest in a clean energy future.
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“The chorus of voices calling on governments to use their covid-19 recovery packages to create sustainable economies is growing,” said Inger Andersen, Executive Director of UNEP, in a statement. “This research shows that renewable energy is one of the smartest, most cost-effective investments they can make in these packages.”