The lack of adequate progress in the global energy transition will require even more investment, and a systematic change in the volume and type of investments is necessary to prioritize the transition, finds a new report by International Renewable Energy Agency (IRENA).

The agency’s World Energy Transitions Outlook 2023 Preview has called for a significant and fundamental course correction in the energy transition to realign its progress.

Despite reaching a new record of $1.3 trillion in 2022, global investment in energy transition technologies must more than quadruple to over $5 trillion annually to stay on the 1.5°C pathway.

The report stresses that cumulative investments of $44 trillion by 2030 will be required, with transition technologies representing 80% of the total, i.e., $35 trillion, prioritizing efficiency, electrification, grid expansion, and flexibility.

It highlights that 41% of planned investment by 2050 still targets fossil fuels and calls for redirecting around $1 trillion of annual fossil fuel investment by 2030 towards transition technologies and infrastructure to meet the 1.5°C target.

The report also stresses the importance of public sector intervention to ensure a more equitable distribution of investments across countries.

This requires significant investment and comprehensive policies worldwide to accelerate the growth of renewable energy sources and enable structural changes that support the transition.

While progress has been made, particularly in the power sector, where renewables make up 40% of installed power generation globally, they still contributed only 83% of global power additions in 2022.

The study warns that meeting the 1.5°C pathway requires a significant increase in deployment levels, from the current 3,000 GW to over 10,000 GW by 2030, an average of 1,000 GW annually.

IRENA outlines three priority pillars of the energy transition: physical infrastructure, policy and regulatory enablers, and a well-skilled workforce. All these require significant investment and new forms of cooperation among all actors in the energy transition.

Moreover, deployment is currently limited to specific regions, with China, the European Union, and the United States accounting for two-thirds of all additions last year, leaving developing nations behind.

Less than 50% of the world’s population currently benefits from 85% of global renewable energy investment, and Africa accounted for only 1% of additional capacity in 2022.

IRENA’s Director-General Francesco La Camera stressed the critical nature of the situation, noting that a profound and systemic transformation of the global energy system is required in under 30 years.

La Camera also emphasized the need for a new approach to accelerating the energy transition, as mitigation measures alone will not be enough to shift to a renewables-based energy system.

Last November, IRENA said at the U.N. Climate Change Conference COP27  that the collective effort to switch to renewables and make the energy transition is not enough despite the Glasglow Climate Pact.

According to a BloombergNEF report, global investment in energy transition reached a record $755 billion in 2021.