A new report from the UN Environment Program (UNEP) highlights the opportunity for countries to invest in clean energy and sustainable economies during COVID-19 recovery. The investigation revealed that renewable energy is now more cost-effective than ever.
The experts explained that prioritizing clean energy in economic recovery packages would not only create new jobs, but could also put the world on track to meeting the targets of the Paris Agreement.
“Renewables such as wind and solar power already account for almost 80 percent of newly built capacity for electricity generation. Investors and markets are convinced of their reliability and competitiveness,” said Svenja Schulze, Federal Environment Minister at BMU.
“The promotion of renewables can be a powerful engine for the recovery of the economy after the coronavirus crisis, creating new and secure jobs.”
“At the same time, renewables improve air quality thus protecting public health. By promoting renewable energies within the framework of coronavirus economic stimulus packages, we have the opportunity to invest in future prosperity, health and climate protection.”
The UN report, Global Trends in Renewable Energy Investment 2020, analyzed clean energy commitments made by countries and corporations for the next decade.
Collectively, commitments to new non-hydro renewable power capacity are equivalent to 826 gigawatts by 2030. According to the report, the addition of around 3,000 GW is needed in this timeframe to reach the primary climate target of the Paris Agreement – limiting global warming to under two degrees Celsius.
The study also showed that clean energy investments planned for the upcoming decade fall short of the investments made over the last decade by about 1.7 trillion USD. At the same time, the cost of installing renewable energy has hit new lows, which means that future investments will deliver far more capacity.
“The chorus of voices calling on governments to use their COVID-19 recovery packages to create sustainable economies is growing,” said UNEP Executive Director Inger Andersen. “This research shows that renewable energy is one of the smartest, most cost-effective investments they can make in these packages.”
“If governments take advantage of the ever-falling price tag of renewables to put clean energy at the heart of COVID-19 economic recovery, they can take a big step towards a healthy natural world, which is the best insurance policy against global pandemics.”
According to the new report, renewable energy capacity grew by an unprecedented 184 GW in 2019. While this amount of additional capacity is a 12 percent jump compared to 2018, the dollar investment was only one percent higher in 2019.
Improvements in technology and competitive markets continue to drive down the costs of wind and solar power. In the second half of 2019, the costs for electricity from new solar photovoltaic plants were 83 percent lower than a decade earlier.
“We see the energy transition is in full swing, with the highest capacity of renewables financed ever. Meanwhile, the fossil fuel sector has been hit hard by the COVID-19 crisis – with demand for coal- and gas-fired electricity down in many countries, and oil prices slumping,” said Nils Stieglitz, President of Frankfurt School of Finance & Management.
“The climate and COVID-19 crises – despite their different natures – are both disruptions that command attention from policy makers and managers alike. Both crises demonstrate the need to increase climate ambition and shift the world’s energy supply towards renewables.”