‘It’s not a grant charity’ — experts make the business case for renewables
“The business case for renewables is here; it’s not a grant charity enterprise anymore,” said Adnan Amin, director-general of the International Renewable Energy Agency (IRENA), an intergovernmental organization that supports countries in their transition to a sustainable energy future. “It’s a growth agenda.”
Substantial investments by countries, such as China’s goal to have 15 percent of its electricity come from renewable sources by 2020, represents a “truly remarkable” level of investment, Amin said.
Last year, global investments in renewable energy increased 17 percent after two years of declines, topping $270 billion, according to a report released in March by the U.N. Environment Programme.
But in order to continue that growth, market, policy and regulatory changes are required, the panelists said.
That could mean combining smaller countries into regional partnerships in order to incentivize renewable energy companies to invest.
It could also come from changing underlying regulations. In the Caribbean, for example, where altering the Petrocaribe agreement in which countries that purchase oil from Venezuela receive preferential payment could spur private-sector development in renewables.
Many of the Caribbean islands are rich in renewable resources like solar, and in some cases geothermal and wind, said Amos Hochstein, special envoy and coordinator for international energy affairs for the Bureau of Energy Resources at the U.S. Department of State.
Diversifying energy sources also bolsters energy security, he said.
“This is part of national security,” Hochstein said. “There are other reasons to look at this other than climate alone if that causes you heartburn.”
What’s the plan after Paris?
As the Paris climate talks approach, renewable energy offers a way for developing nations to both grow economically and meet the targets hammered out during the international negotiations, analysts say.
“As we look at the road to Paris, it’s all about the goals,” Hochstein said. “I think how do we get those goals and implement them so they’re not just another set of numbers. What’s the road map after Paris, because Paris is not enough.”
More than 80 percent of global carbon emissions are generated by the energy sector, so “energy policy change is climate change policy,” Hochstein said.
The world could double its share of renewable energy from 18 percent in 2010 to 30 percent by 2030, according to an international study conducted by IRENA called REmap 2030.
To make that happen, the United States — which is a huge market for renewables and thus wields significant power — has a role to play as a facilitator.
“There is plenty of capital in the markets,” said Todd Foley, chief strategy officer for the American Council on Renewable Energy (ACORE). “The issue is: What’s the policy signal to the market? It’s a big question in the U.S. and globally.”
Panelists to U.S.: Don’t go backward
The world is closely watching the policies the United States implements on renewable energy, such as state renewable portfolio standards and incentivizing the private sector to provide funding for rooftop solar systems.
U.S. investment in research and development has been a crucial driver of decreasing the cost of renewable energy technology.
“The genius of the U.S. has always been in investment in R&D, technology and innovation,” Amis said. “My message today really is this is the next frontier of growth; please don’t take your eye off of it. Don’t allow for a fall back in terms of research and development expenditure.”
In closing, the panelists cautioned that although it is feasible to see renewable energy double globally by 2030 and take over as the dominating energy sector, the process to getting there will be no doubt very challenging.
“What we’re describing is where the world should go and can go, but that doesn’t mean it will,” Hochstein said. The decisions the world will make in the next few decades will determine the fate of not only the renewable energy sector, but the global climate.
“I think why we’ve seen Secretary [of State] Kerry advocate so hard,” he added.