Power grids, undersea cables and ports are overlooked yet essential connectors ensuring renewable energy can flow across great distances from production to consumption.
That’s a key takeaway from a virtual interview Cipher conducted earlier this month with Francesco La Camera, the director general of the International Renewable Energy Agency (IRENA).
The world must prioritize building up this physical infrastructure to speed up the energy transition, La Camera said from IRENA’s headquarters in Abu Dhabi, United Arab Emirates.
“The structures that sustain the actual energy system [based on fossil fuels] are not enough to sustain the acceleration of the new energy system that is coming,” said La Camera, an Italian national appointed to the position in 2019. “The role of infrastructure should be understood.”
IRENA is a global intergovernmental agency founded in 2009 as renewable energy was gaining a foothold around the world. With 167 member countries, it has far more members than the well-known International Energy Agency, which has just 31 and was initially focused narrowly on oil security. IRENA’s stature is growing alongside renewables throughout the global economy, and the organization often partners with IEA.
Government ministries need to be re-organized to better reflect the green transition, universities need to refresh their curricula to train students for clean energy jobs and new legal regimes need to accelerate the deployment of renewables, La Camera said.
“These [current] structures are looking at the old energy system, not at the new energy system that is coming,” he said.
His comments come as renewable energy deployment faces economic headwinds sparked by inflation, high interest rates, supply chain problems and permitting delays in both the United States and Europe.
These setbacks don’t bode well for the United Nation’s major annual climate conference, known as COP28, which will take place in the UAE, where IRENA is headquartered, later this year. At the event, government leaders will do the first “global stocktake,” to assess progress on the 2015 Paris Climate Agreement goals. Headway on the ambition to replace fossil fuels with renewable energy has largely been considered insufficient.
“The governments and the institutions should say ‘we have not been able to [do] what we have been requested to do,” La Camera said about the upcoming COP28. “It will be very important that [they] come with a solution.”
The need to ramp up the physical infrastructure underpinning renewables has been growing more acute on both sides of the Atlantic.
In the U.S., wind and solar generators must wait years to put clean electricity on the grid due to a backlog of applications filed by companies to connect, according to a study published earlier this month by the U.S. Energy Department’s Lawrence Berkeley National Laboratory.
The delays are symptoms of a wider problem: There are not enough modern transmission lines to support the transition from a fossil fuel-based, centralized system to a decarbonized, decentralized energy grid.
“We’ve been doing things the same way for 100 years and we’ve been building policies on top of each other,” James Hewett, manager for policy and advocacy at Breakthrough Energy said during a recent event in Washington, D.C, “How do we start to pull those bricks down and build the grid that we need?”
A similar debate is taking place in the European Union. Member countries are working to better connect their power lines across borders to rely on each other for electricity when needed and to bring more renewables online.
Sea routes and ports are also expected to play a growing role in the EU’s decarbonization goals, especially as the bloc hopes to import renewable hydrogen from distant countries, like Namibia.
Ports are also key for transporting equipment for offshore wind projects, a role industry groups hope the EU recognizes as part of a wider revision of its transportation infrastructure rules.
“Without these ports, the supply of renewable energy will be hampered,” Isabelle Ryckbost, the secretary general of European Sea Ports Organisation, said in a statement last week.
Lower income countries, especially, need massive investments in physical infrastructure, La Camera said.
Roughly 85% of global renewable energy investments benefitted less than 50% of the world’s population in 2022, according to IRENA. The entire continent of Africa—54 countries—accounted for only 1% of additional renewable capacity last year.
La Camera said international lenders need to channel more funds to developing countries and specifically target infrastructure, since “that also means promoting development.”
A push to reform the World Bank and free up more funds for climate lending has led the agenda at high-level meetings that concluded last week.
“Multilateral financial institutions have to focus…on accelerating the renewal or the building of physical infrastructure that may serve the new energy system,” La Camera said. “If this will happen with a clear plan, the private investment will come immediately after.”
Editor’s note: James Hewett is a manager for policy and advocacy at Breakthrough Energy, which also supports Cipher.
Lunchtime Reads and Hot Takes
US gives final nod to huge power line from Wyoming to Nevada — Reuters Amy’s take: Patience (and money to burn) is a virtue when success takes 15 years.
US grid interconnection backlog jumps 40%, with wait times expected to grow as IRA spurs more renewables — Utility Dive Amy’s take: We need to be skating on ice, when instead we’re crawling through mud.
G7 ministers set big new targets for solar and wind capacity — Reuters Amena's take: G7 countries leave door open for some fossil fueled power by 2030. Is it a loophole or a realistic declaration?
The climate change debate dividing the World Bank — Politico Anca’s take: It really is all about the money. In this case, it’s about the unwillingness to bring more of it to the table.
Treasury is urged to tighten definition of ‘green’ hydrogen — E&E News (paywall) Amy’s take: Serious question: why is renewable hydrogen held to a different (higher) standard than corporate procurements?
Barcelona bets on green to boost city’s mental health — Politico Anca’s take: I like this. We need more of these win-win examples that can accelerate the energy transition.
U.S. Car Brands Will Benefit Most From Electric Car Tax Breaks — The New York Times Amena's take: President Biden's made in America policy is slowly showing dividends for U.S. automakers, with only 10 models qualifying for the full $7,500 tax credit.
COP28 president: world needs business mindset to tackle climate crisis — The Guardian Amy’s take: Interesting that he did an interview with The Guardian. Also, I’d like to learn more about how and over what time period UAE diversified its GDP away from oil.
Europe’s most powerful nuclear reactor kicks off in Finland — AP News Anca’s take: Key fact: “The Olkiluoto 3 is Western Europe’s first new reactor in more than 15 years.” It also took 14 years longer than expected to bring it online.
The Age of Energy Insecurity — Foreign Affairs Amy’s take: UAE could be hosting the COP right as oil prices soar. Oh boy! On another note, cool idea to have IEA help manage stockpiles of critical minerals just like it does for oil.
Facing brutal climate math, US bets billions on direct air capture — Reuters Amena's take: Scaling and duplication are key not just for lowering costs for direct air capture but also for other clean technologies, like making renewably sourced hydrogen.
Adani’s utility to supply mostly green power to Mumbai by 2027 — E&E News (paywall) Amy’s take: A key thing about near-term targets is that we can fact-check them a lot more readily! And in climate/energy, 2027 definitely counts as near term.
More of what we're reading:
EU and Norway to Form ‘Green Alliance’ on Carbon Capture and Hydrogen — Bloomberg
The United States generated more electricity from renewable energy than from coal last year, a first that illustrates the transition underway in the country.
The data, from the U.S. Energy Information Administration, comes as wind and solar also accounted for a record amount of global electricity, according to new data from think tank Ember.
These trends are likely to continue, despite an overall uptick in fossil fuel generation last year.
Declining construction costs and favorable government subsidies ramped up the share of renewables in the U.S.’s overall energy mix, boosted almost exclusively by increased wind and solar generation, to just over 20% of power generation in 2022.
These increases occurred despite growing challenges posed by higher interest rates, supply chain constraints and delays in permitting and grid connections.
Other renewable sources—hydropower, geothermal and biomass—didn’t contribute to the increase in 2022.
As Cipher reported in February, the increasing share of installed renewable capacity (the maximum total amount of electricity a power plant can generate at a specific point in time), corresponds with an increase in renewable energy generation (the actual power generated by a plant over a period of time).
Because of their variable nature, wind and solar have lower relative actual generation compared to electricity sources that run constantly, like natural gas and nuclear power.
In contrast, coal-fired generation dipped to 20% of the electricity mix last year as a record number of coal power plants retired. Coal generation is expected to continue declining to 17% in 2023.
Most electricity in the U.S. still came from natural gas in 2022, it’s share increasing to 39% as the U.S. economy recovered from the Covid-19 pandemic.
AND FINALLY...
Drone detector
Amena saw this drone at the CERAWeek by S&P Global conference in March in Houston, Texas. Aerodyne Group's drone technology can be used to inspect critical infrastructure, like transmission lines. Earlier this year, the company’s drones surveyed natural gas pipelines in Malaysia.
Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.
Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.
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