Keynote Address By. Mr. Adnan Amin Director-General International Renewable Energy Agency. to the

Transcription

1 Keynote Address By Check against delivery Mr. Adnan Amin Director-General International Renewable Energy Agency to the ICC Commission on Environment and Energy Abu Dhabi on Renewable Energy in a World of Scarcity, Rising Demand, Energy Insecurity and Climate Change Abu Dhabi, UAE, 5 November 2014

2 Your Excellency, Ibrahim Mahmud, Your Excellency, Ahmed Saif Belhasa, Ladies and Gentlemen, It s a great pleasure for me to be here and have this opportunity to attend the launch of the ICC Commission on Environment and Energy in Abu Dhabi. I think it is very significant that this event is happening in Abu Dhabi because in the last years we have seen the evolution of Abu Dhabi as one of the leaders serious on clean energy for the future of the world. The fact that my organization, IRENA, which brings together now more than 170 countries, is located here in the UAE, is a testament to the understanding of the international community that this region has become one of the most susceptible to new ideas and the questions of sustainability for the future. It is inspiring to see this in an oil producing country that has generated its wealth on the basis of fossil fuels and hydrocarbons become the leader for the ideas of the future also. So I wish you luck in your preparations. The importance of what you are talking about today on climate and energy has never been greater. Just this Sunday, the Intergovernmental Panel on Climate Change issued its most alarming assessment yet. Unless the world urgently curbs the emission of greenhouse gases, humanity faces severe, pervasive and irreversible consequences. Ladies and Gentlemen, scientists don t use such words lightly. The Secretary-General of the United Nations said yesterday that there is no ambiguity in the message anymore and the imperative for action by leaders is now. But the IPCC report, which is probably the most definitive outline on climate change to date has an encouraging message to add. The chairman of the IPCC, my friend Dr. Rajendra Pachauri was quoted: We have the means, the solutions are many, and allow for continued economic and human development. This means that responding to climate change is not the end of the road for us, it s the beginning of the road to prosperity and we have to use all of our imagination and argument to go in that direction.

3 Within these lies a dramatic revelation: we can keep CO2 concentrations down to manageable levels, whilst also becoming healthier and wealthier in the process. This is very big news. Much of the messaging around climate has been that these environmentalists who are talking about climate change just talk about development. That is not true. One of the most important reasons for this silver lining is the rise of modern renewable energy. Over the past four decades, the world has seen industrialisation, socio-economic development, consumption and population growth on an unprecedented scale, including a growth in energy demand that was close to 250per cent. This growth will continue. By 2030, world electricity demand is expected to increase by 60 percent; tripling in the fast developing Africa and doubling in Asia. But relying on traditional methods to meet this demand is unsustainable. Countries around the world also face rising energy insecurity, and economic uncertainty. Growing populations, in increasingly pressured environments, demand a better way of life. A decade ago, these challenges might have seemed insurmountable. But over the past five years, an encouraging development has taken place, which will play a major part in the solution. Renewable energy became cheap. The cost of solar panels in this period has fallen by 75 per cent. Onshore wind has become the least-cost option for new grid supply in many countries worldwide even those with shale gas, like the United States. Renewables took their place as the cheapest off-grid option everywhere. Governments, businesses and individuals have taken note, and a transformation has begun, redefining the way energy is generated, distributed and consumed. In just the last three years, well over 100 gigawatts of new renewable capacity has been added globally every year equivalent to the total generation capacity of Brazil.

4 More new renewables have been installed than fossil and nuclear power combined for the past three years. So the majority of the global capacity addition has come from renewables. Global investment in renewable generating capacity rose from 55 billion dollars in 2004 to 214 billion dollars in 2013; and exceeded investment in new fossil based power-generation capacity for three years running. This transformation is increasingly taking place in the developing world. So there is a shift from the deployment of renewables in developed countries to the developing countries. In 2013, developing countries installed around 93 billion dollars-worth of renewables, as compared to 122 billion in developed countries. The UAE s decision to host IRENA in Abu Dhabi, and its investment in the world-class Masdar Institute, have issued a wake-up call for other countries. If a major oil producer was betting on renewables, something must be happening. Abu Dhabi set a requirement of 7per cent renewable energy generation capacity by Dubai has set a target of 5per cent renewable energy in the fuel mix by In 2013, the Middle East s largest solar project, the 100MW CSP plant Shams 1, was inaugurated in Abu Dhabi. And in Dubai, a 13MW solar PV power plant was opened in 2013, the first phase of a 40 square kilometre project which will produce 1,000MW of clean energy. The UAE is spurring investing in renewables overseas, including a 20per cent stake in the 1000MW London Array offshore wind project, and a 40per cent stake in the joint venture Torresol with Spain s Sener. And this is just the beginning. As of 2014, renewable energy became cost-competitive here for the first time and may even be the cheapest source of new power supply if we levelise the playfield for energy.

5 We have recently issued a roadmap to 2030 for the doubling of the renewable energy worldwide and we have just issued the first three country reports on China, US and the UAE. REmap found that the UAE could achieve at least 10per cent of renewable energy in its primary energy mix by 2030, and 25per cent in its power generation mix, providing net savings of USD 1.9 billion annually. Rather than spending money, saving money. Throughout the region, a similar story is unfolding. Countries whose wealth was built on hydrocarbons are realising that as their own domestic energy demand grows, meeting it with renewables offers a more sustainable future: one that opens up more opportunities for exports, and high value local industries. Worldwide, new and innovative sources of financing for renewables are emerging - from small-scale community financing to large institutional investments. I have been in a series of meetings, including the Wall Street Renewable Energy Finance Forum in New York, where some of the most innovating models for financing renewable energy are now being put on the table. One of the instruments are green bonds. Green bonds to finance renewable energy projects have been issued for over 16 billion dollars this year. This is surpassing the 14 billion dollars issued in all of 2013, so this year we have already passed just midway through the year the 2013 total. There are forecasts in the financial community that the green bond market will grow by 100 billion dollars. We are seeing exponential growth in technology, business models and financing solutions. At this September s Climate Summit in New York, more than US$2 billion were made in pledges to the Green Climate Fund (GCF) to finance clean energy projects and carbon abatement in the future. This is big business, and it offers big opportunities for the future and must be of interest for forums like yours.

6 Large non-energy corporates with which we are engaged like IKEA, WalMart and Google have wasted no time getting on board. Google alone has invested over 1.4 billion dollars in wind and solar. They tell us that it s not because they want to be nice and green, it s because of the attractive financial returns. Renewable energy has become a major employer, supporting around 6.5 million direct and indirect jobs in 2013 worldwide, a 14 per cent growth from the year before. Renewables are boosting gross domestic products. In China, for example, the solar PV industry generated 52 billion dollars in national income. And renewable energy everywhere is proving to be excellent for countries balance of trade. But this does not mean that we can rest quite yet. Despite these gains, the world is currently only on track to reach a 21 per cent share of renewable energy by This falls far short of a potential doubling, and will not keep carbon dioxide levels below the tipping point of 450 ppm. The reason is because systems run on renewables work quite differently to systems run on fossil fuels. Our recent flagship publication, Rethinking Energy, shows how achieving the energy transformation will require a significant commitment by policy makers. A system-level approach to policy-making is needed, with stable, transparent and predictable policy frameworks that will anchor investor confidence. Market conditions need to be improved, with interventions targeted at soft or non-hardware costs to ensure grid parity. New grid infrastructure is needed, with planning beginning now. And fossil fuel subsidies - which currently cost GCC countries between 9per cent to 28per cent of GDP limit renewable energy s ability to compete on a level playing field.

7 The UAE has taken many important steps. Abu Dhabi and Dubai have a regulatory framework to allow the private installation and generation of photovoltaic power. ADWEA, the largest utility, is rolling out smart meters across its multi-emirate distribution zone. With enough commitment, UAE will lead the way to a new industrial revolution. I was in New York during the Climate Summit in September this year. We were asked by the Secretary General to propose solutions on renewable energy as the urgency of climate change faces us. 400,000 people, citizens, were on the streets of New York, marching, in which we participated. It was a clear sign that citizens and your customers, companies, members of ICC want change. The scientists have sounded the alarm, and the people have mobilised. It is now up to policy makers and business leaders to play our part. I hope we are up to the task. Initiatives like this new Commission on Environment and Energy give me hope that we can move into a more positive future. I wish you the best of luck with this initiative and I congratulate you on your achievement