BAKU, Azerbaijan, Jan.12
By Leman Zeynalova – Trend:
The deployment of energy transition-related technologies required to put the world on the 1.5°C pathway necessitates USD 131 trillion of aggregate investment between 2021 and 2050, Trend reports citing the International Renewable Energy Agency (IRENA).
This represents an average annual funding requirement for the energy sector of about USD 4.4 trillion between 2021 and 2050.
“When it comes to renewable power, which is identified as one of the major avenues for achieving the energy transition, the required annual investment amounts to nearly USD 1 trillion for the 2021–2050 period, more than triple the renewable energy power investment of the USD 300 billion estimated for 2020. The investments represent the needs for installing the technology and exclude the investments required to create an enabling environment for the transition (e.g. capacity building and the implementation of structural change and just transition policies),’ reads the report released by IRENA.
The agency believes that realizing the climate-safe scenario will depend on securing significant funding for energy transition technologies (i.e. renewables, energy efficiency, electrification of heat and transport).
“This requires drastic cuts and/or repurposing of current investments in fossil fuels over the coming years and decades, with oil and coal investments expected to decline the fastest, followed by natural gas. Over the 2020–2050 period, cumulative investments of more than USD 24 trillion must be redirected from fossil fuels towards energy transition technologies. Countries would be well advised to begin this capital reallocation rapidly, as delaying action would cause fossil fuel stranded assets to nearly double, from an estimated USD 3.3 trillion to an alarming USD 6.5 trillion by 2050,” says the report.
In addition, IRENA analysts note that support is needed to ensure a just transition, including the reallocation and creation of new jobs and services.
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