Leading companies call to double renewable energy in 10 years: WBCSD report
- 19 November 2015
LONDON: Sixteen leading energy and technology companies are calling to nearly double renewable energy capacity by 2025, suggesting feasible and economically viable solutions to deploy a further 1.5 terawatts worldwide.
“Renewable energy is reliable and increasingly competitive,” the CEOs state in the ‘Scaling Up’ report, which outlines an action plan to achieve such an ambitious target. “With power, comes responsibility. The time to act is now.”
The signatories are part of the World Business Council for Sustainable Development’s (WBCSD) collaborative platform ‘Low Carbon Technology Partnerships initiative’, which seizes the business opportunities for ambitious climate action while showcasing the best solutions. Scaling up renewable energy is one of the goals of the initiative, based on the International Energy Agency (IEA) 2 degrees scenario.
A temperature rise of 2 degrees Celsius is the internationally agreed limit based on scientific references, to avoid the worst effects of climate disruption. The scenario drafted by IEA indicates that scaling up renewable energy would give an 80% chance of keeping under this dangerous threshold. By 2050, this new system would cut energy-related CO2 emissions by more than half compared with 2009 levels, and continue to curb emissions until 2100.
Image: Renewable energy deployment required under IEA 2DS scenario, from the WBCS ‘Scaling Up’ report
There are already many examples today of how renewable energy is a feasible and economically viable solution to curb emissions and foster new jobs. A striking example of that is The Climate Group’s campaign RE100, which brings together leading companies committed to using 100% renewable energy. Through the success of its partners, the campaign demonstrates how this path makes complete economic sense, and highlights the growing market that exists for renewables.
However, there are still barriers that prevent the wide-scale spread of renewable energy. In particular, renewables are still not well integrated into electricity grids and markets. To date, there is some progress in the capability of wind and photovoltaic energy generators to provide some sort of grid support, but these opportunities must be expanded and integrated, states the report.
Renewable energy has the intrinsic ability to vary its output at short notice, but market designs that don’t allow the full participation of renewables and lack interconnections drastically limit the potential of these clean technologies.
LOW CARBON FINANCE
Another issue raised by the report is the lack of substantial funding for green technologies. Private and institutional investors see the steady revenue stream coming from renewable energy projects, but significant scale up is needed to achieve the full potential of such technologies.
Last year, green bonds reached US$36 billion globally – a threefold increase compared with the US$11 billion issued in 2013; a good increase, but still just a fraction of the global bond market, which reached US$100 trillion. To scale this type of finance, it is necessary to commit to robust verification and transparency as well as the de-risking of project pipelines, states the report.
As the companies that have joined RE100 already demonstrate, there is a huge corporate appetite for renewable energy procurement. The signatories of WBCSD’s paper commit to work with The Climate Group and CDP’s RE100 initiative to establish a forum for renewable electricity buyers and sellers, and facilitate rapid scale-up of corporate use via Power Purchase Agreements.
Through workshops, reports and business case studies, the new collaborative space will engage with policymakers to understand and overcome the regulatory barriers to widespread use of renewables.
Finally, the report aims to promote sustainable electrification of remote areas through the accelerated deployment of low carbon micro-grids. The Climate Group just ended the first phase of our Bijli – Clean Energy for All project, which connected more than 60,000 people in rural India to solar power.
Today 1.3 billion people lack electricity access, while many are forced to use unhealthy fuels like diesel and kerosene. Business is a key actor to fulfil such demand, but again policymakers are called to overcome the regulatory barriers to spur economic and social development. Micro-grids powered by renewable energy are the ideal solution for many areas, with a clear business case for this.
“A clear policy framework brings confidence to investors, clarity to the market and incentives to energy producers to become more efficient,” conclude the authors of the report. “It promotes sounder and more transparent political decision making and brings a range of wider benefits to society as a whole.”
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by Ilario D'Amato