Energy demand is projected to grow by a third in the next 15 years. A rapid scale-up of low-carbon energy sources and energy efficiency is essential to drive global growth, reduce the air pollution and greenhouse gas emissions (GHGs) associated with fossil fuel use and help provide reliable access to modern energy for those who lack it. This need has become more urgent following the global commitment made in the UN Paris Agreement in December 2015 to reducing net GHG emissions to zero in the second half of the century.
There has been significant progress in recent years, partly due to sharp declines in the cost of renewables. Solar PV modules, for example, are about 80% cheaper than they were in 2008. Clean energy is increasingly cost-competitive with fossil fuels. In 2013, for the first time, the world added more low-carbon electricity capacity than fossil fuel capacity. According to IRENA (the International Renewable Energy Agency) the share of renewable energy in total electricity generation can reach as much as 36% by 2030 with technologies that are available today, if the right conditions and investments are secured. Given an estimated 1.1 billion people currently without access to electricity and 2.9 billion lacking modern cooking facilities, increasing international financing for energy access is also a key priority.
This paper focuses on strategies to facilitate increased investment in clean energy – in particular, in low-carbon electricity supply and energy efficiency in buildings and industry. The paper begins by examining the global energy challenge. Section 3 explores the risks commonly perceived to be associated with clean energy projects, and how they can be mitigated. Section 4 discusses the challenges of financing energy efficiency and energy access. Section 5 highlights the key opportunities for international cooperation, and Section 6 offers some recommendations.