Transitioning to renewable energy – where philanthropy can make a difference

 

Christine Lins

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On June 1 2016 REN21 published the most comprehensive annual overview of the state of renewable energy. The Renewables 2016 Global Status Report reveals that renewables are now firmly established as competitive, mainstream sources of energy in many countries around the world.

2015 was a record year for renewable energy installations. Renewable power generating capacity saw its largest increase ever with an estimated 147 gigawatts (GW) added. Solar and wind are the investments of choice for new power installations. Modern renewable heat capacity continued to rise and the use of renewable also expanded in the transport sector. Distributed renewable energy is advancing rapidly to close the gap between the energy haves- and have-nots.

These results were driven by several factors. First and foremost, renewables are now cost competitive with fossil fuels in many markets. In addition, government leadership continues to play a key role in driving the growth of renewables, particularly wind and solar, in the power sector. By early 2016, 173 countries had renewable energy targets in place and 146 countries had support policies. Additional growth factors include better access to financing, concerns about energy security and the environment and the growing demand for modern energy services in developing and emerging economies.

It has also become clear that renewable energy deployment increasingly makes good business sense. By the end of last year, more than 50 of the world’s largest companies had joined RE100, signing up to a pledge to get 100% of their electricity from renewable sources. In the US alone, 154 companies have committed to purchasing 100% renewable energy.

2015 was a record year not only for new installations, but also for investment – reaching $286 billion worldwide in renewable power and fuels; if investment in large hydropower (>50 MW) and in heating and cooling is taken into account, the total is far higher. With China accounting for more than one third of the global total, developing countries surpassed developed countries in total renewable energy investments for the first time.

The increased investment is accelerating technological advances, cost reductions and new jobs. There are now 8.1 million people working in the renewable energy sector – representing steady growth in stark contrast with depressed labour markets in the broader energy sector.

Given that renewables are beating fossil fuels in key markets despite the latter’s historically low prices and massive structural and fiscal advantages (fossil fuels get nearly four times more than renewables for one thing), it’s clear that this momentum is unstoppable. And that’s even before taking account of plans to accelerate the renewables transition which resulted from the December Paris Climate Agreement.

However this size of this momentum needs to be increased. By the end of 2014, renewables provided 19.2% of the global final energy consumption, with almost all of it occurring in the power sector. If we are to limit global warming to less than two degrees Celsius then concerted efforts are needed in the heating and cooling and transport sectors.

Current policy initiatives in both sectors are not sufficient to drive the transition from fossil fuels. Policies in the heating and cooling sector, in particular, have not progressed, although heat represents nearly half of annual final energy consumption. To resolve a structural problem of this magnitude, both supply- and demand-side barriers to increasing the use of renewables in both sectors must be addressed, such as lack of trained personnel, costs to retrofit or upgrade, lack of awareness or knowledge of renewable alternatives, reluctance to change and low consumer confidence.

Philanthropic organisations are well placed to drive the energy transition in the heating and cooling and transport sectors where not so much is happening yet but which are crucial in decarbonising the energy sector. Philanthropy can help tackle this by advocating for policy support options and lobbying governments to take a pro-active role. They can also support the development of programmes including public awareness campaigns and training activities, demonstrating that the shift to clean energy is possible. Philanthropy can also play a role in education: by financially supporting the development of innovative curricula to fundamentally change how we design our energy systems and to ensure the integration of energy efficiency.
Scaling-up renewables is often less a problem of finance, and more one of political will and of capacity. Strong leadership is necessary to advance the energy transition. Philanthropic organisations can fill this role by being the visionary leaders for a clean, efficiency energy vision for the future.

Christine Lins is executive secretary of REN21

See also Climate philanthropy after Paris – Alliance’s June 2016 special feature guest edited by Nnimmo Bassey, Terry Odendahl and Michael Northrop out tomorrow.


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