Transitioning to clean energy technologies not only reduces greenhouse gas emissions but also drives down the operating costs of the global energy system. By investing in clean energy solutions, governments, businesses, and households can achieve significant cost savings over the next decade, compared to maintaining current policy setting, says a new report by the International Energy Agency (IEA).
COST-COMPETITIVENESS OF CLEAN ENERGY
Clean energy technologies, such as solar PV and wind power, are increasingly cost-competitive compared to conventional fossil fuels like coal, natural gas, and oil. Despite higher upfront investment requirements in some cases, clean energy options offer lower operating expenses over their lifetimes, making them a more economically viable choice, says the report, Strategies for Affordable and Fair Clean Energy Transitions.
NEED FOR UPFRONT INVESTMENT
Realizing the full benefits of clean energy transitions requires higher levels of upfront investment, particularly in emerging and developing economies. However, perceived risks and access to finance often hinder clean energy investments in these regions, highlighting the need for targeted interventions and support mechanisms.
ADDRESSING FOSSIL FUEL SUBSIDIES
Distortions in the global energy system, such as fossil fuel subsidies, pose additional challenges to clean energy transitions. Governments worldwide spend billions subsidizing fossil fuel use, creating barriers to the adoption of clean energy technologies. Redirecting these subsidies towards clean energy investments is crucial for accelerating the transition.
TRANSITIONING TO ELECTRICITY DOMINANCE
As clean energy technologies gain momentum, electricity is poised to become the primary fuel source for consumers worldwide. This shift, driven by the adoption of electric vehicles, heat pumps, and electric motors, promises more predictable energy costs and reduced reliance on volatile oil prices.
BENEFITS FOR VULNERABLE COMMUNITIES
Targeted support and incentives can enhance the uptake of clean energy technologies among vulnerable communities, ensuring that all consumers benefit from cost savings and sustainability gains. By addressing inequities in the energy system, governments can promote inclusive growth and support international energy and climate objectives.
ENABLING CLEAN ENERGY ACCESS
The IEA report outlines a series of policy measures to facilitate the widespread adoption of clean energy technologies. These include energy efficiency retrofit programs, support for efficient heating and cooling solutions, incentives for clean transport options, and the phasing out of fossil fuel subsidies.
ADDRESSING INEQUITIES
Policy intervention is crucial for addressing existing inequalities in the energy system, particularly in emerging and developing economies where access to electricity and clean cooking technologies remains limited. By prioritizing equity, governments can ensure that clean energy transitions benefit all segments of society.
The IEA report emphasizes the urgent need to accelerate clean energy transitions to improve energy affordability and equity globally. By investing in clean energy technologies, governments can achieve significant cost savings, promote sustainability, and address existing inequities in the energy system. Policy intervention and targeted support are essential for overcoming investment challenges and ensuring a fair and inclusive transition to clean energy.
