$20bn for Indonesia’s energy transition and global hydrogen accelerators: 9 key takeaways from Energy Day at COP27
The second week of negotiations at COP27 is now well underway, and, at the same time, world leaders are convening in Bali for the 2022 G20 Summit. Recap on nine of the big sustainability stories from today with us.
After a quieter day in terms of new announcements on Monday (15 November), for gender and water day, energy day at COP27 was far busier. There was also a lot of buzz around the start of the G20 Summit in Bali, Indonesia. While the majority of media headlines have focused on tensions between Russia and other nations, this summit is also an opportunity for refreshed ambition on climate and on sustainable food systems. There is also the risk of backsliding or weak agreements here at this crucial moment.
To help you recap on this busy day of proceedings, we’ve pulled out nine of the major announcements.
1) $20bn Just Energy Transition Partnership signed off for Indonesia
After the world’s first Just Energy Transition Partnership (JET-P) launched during COP26, for South Africa, G20 members including the UK have been teasing the launch of additional JET-Ps at COP27. JET-Ps funnel a blend of international public and private finance into energy transition activities.
As the G20 Summit opened in Bali, a second JET-P, for Indonesia, launched. The US and Japan spearheaded the negotiations along with Indonesia, which is the world’s fifth-largest emitters. Indonesia’s JET-P will total $20bn – $10bn from government coffers and $10bn from the private sector.
The Indonesian government now has six months to prepare a full plan for how the financing should be invested. Details will also need to be finalised on what proportion of the finance is loans and what proportion is grants, as well as interest rates. Indonesia has a large coal industry domestically and as a coal exporter.
2) Fears of potential ‘backsliding’ on 1.5C target
Last week, the Global Carbon Budget report stated that there is a 50% chance that the 1.5C pathway will be exceeded in under a decade based on current emission trajectories.
Subsequently, there has been concern that nations at COP27 will either seek to remove mentions of 1.5C from the final agreement, or push for weak agreements that would undermine progress.1.5C was added to the original Paris Agreement due to the tireless work of small island states and other most-affected nations and regions, who rallied around evidence that warming beyond this point would be a death sentence for their economies.
COP26 President Alok Sharma has stated: “We’ll either leave Egypt having kept 1.5C alive, or this will be the Cop where we lose 1.5C.
“I have always said what we agreed in Glasgow and Paris has to be the baseline of our ambition. We’ve got to stick to that commitment. We cannot allow any backsliding.”
IRENA’s director-general Francesco La Camera has said: “Anything short of radical and immediate action will diminish, and possibly eliminate, the chance of staying on the 1.5°C or even 2°C path. We do not have a luxury of time to deal with [the climate crisis and short-term crises] separately.”
3) COP27 Presidency focuses minds on African energy transition
The COP27 Presidency is today (15 November) launching the Africa Just and Affordable Energy Transition Initiative (AJAETI). The initiative will run through to at least 2027 and is being supported by IRENA, the IEA, Sustainable Energy For all and Boston Consulting Group.
Its primary objectives are facilitating affordable energy for at least 300 million people in Africa, primarily those in Sub-Saharan Regions; providing universal access to clean cooking fuels and increasing the share of renewable electricity generation in the mix by 25%. Africa’s power sector should be “based on renewables” by the time this decade closes, the initiative states.
We will get more information on which African nations will participate and which will lead initial workstreams later. The first workstream will be mapping out, aligning, and, where necessary consolidating existing programmes and initiatives. Implementation practices will be finalised next year.
Bloomberg NEF revealed today that only 9% of global renewable energy capacity additions in 2021 were in northern Africa. The proportion was even lower in Sub-Saharan Africa.
Simultaneously, concerns have been expressed about the number of gas deals being made on the sidelines of COP, predominantly involving African nations and wealthier international importers. It has also been reported that China’s push for stronger language in the final agreement on all fossil fuels – not just coal – has hit roadblocks with major oil and gas producers.
4) Collaborative push to speed up renewables planning and development made
Another initiative launching today is the Planning for Climate Commission. The Commission is a joint initiative from several major trade associations representing renewables, who will work with governments to remove barriers to planning, approvals and development for projects of all sizes. Removing these bottlenecks will be key to meeting heightened national commitments on additional capacity deployment.
Jointly forming the Commission are the Global Wind Energy Council, Global Solar Council, International Hydropower Association and Green Hydrogen Association.
5) Global Renewables Alliance launches
Speaking of industry bodies, today has also seen the launch of the Global Renewables Alliance. The Alliance brings together industry bodies and organisations for wind, solar, hydropower, green hydrogen, energy storage and geothermal sectors.
The Alliance will act as a unified voice that represents renewables industries and technologies in policy engagement and at UN climate summits.
Commenting on the announcement, GWEC’s chief executive Ben Backwell said: “Massive deployment of renewable energy is the critical element in the battle against climate change and countries will need all of the key technologies represented by this alliance in order to be successful, and it is important that we take a collaborative approach and work together as technologies to help governments and communities achieve the just energy transition to ensure a sustainable and prosperous future.”
6) EY publishes latest run-down of world’s most attractive clean energy investment markets
EY has published its Renewable Energy Country Attractiveness Index (RECAI) every six months since 2003, with the 60th edition out today.
The US and China have retained their top spots in that order. Third place went to Germany, which has climbed one spot after the Federal Government pledged that 80% of the electricity generation mix will be renewable by 2030. The UK dropped one place to fourth.
Elsewhere, the biggest climbers are Greece and Austria, which have each climbed five places. At the other end of the scale, Vietnam slipped six places and Turkey fell five spots. EY discusses “difficult permitting processes” in Vietnam, among other challenges, and concludes that Greece’s broader economic struggles are hitting clean energy hard.
You can read our full story on this RECAI here.
7) Net-Zero Tracker’s latest stocktake is out now…
… and there’s not much progress to celebrate in terms of net-zero targets from regions, cities or corporations becoming more credible.
The stocktake was released at a side event at about 3pm in local time within the Blue Zone. Net-Zero Tracker revealed that only 11% of regions assessed and 10% of all the cities assessed have interim targets to reduce emissions on the road to net-zero. The proportion is higher in the corporate space – 20% – but that still leaves the vast majority of big businesses open to increasing their emissions in the coming years.
The findings also raise concerns about whether businesses are including Scope 3 (indirect) emissions in the scope of their targets, whether entities are over-reliant on offsetting and whether we are properly preparing for the socio-economic impact of the net-zero transition.
8) World Bank launches hydrogen initiative with focus on developing nations
The World Bank Group formally created a new global initiative to boost the deployment of low-carbon hydrogen in developing countries today.
Called the Hydrogen for Development Partnership (H4D), it will raise and allocate blended finance for low-carbon hydrogen production and distribution projects. It will also facilitate international knowledge-sharing and work with governments to increase low-carbon hydrogen requirements.
While hydrogen produces no greenhouse gas emissions at the point of combustion, making it a solution for fuel-switching in hard-to-abate sectors, it is not yet a clean solution. The vast majority of global hydrogen production is currently ‘grey’ – fossil-fuelled.
9) Time for a new generation?
We’ve seen several stories about industries reliant on generators, such as live music and construction, switching to alternative fuels in the UK this year. But progress in other nations has been slower.
To that end, Carbon Trust and Innovate UK have launched the Zero Emission Generators (ZE-Gen) initiative, in a bid to scale the use of alternatives to fossil generators in developing nations. The UK Foreign, Commonwealth and Development Office (FCDO) and the IKEA Foundation are also supporting financially.
ZE-Gen has some £15m in backing so far and the participants are aiming to grow the partnership to, and beyond, £100m. It has stated that its focus areas are demostrating solutions, leveraging finance, enabling data and knowledge sharing and building cleantech ecosystems.
“Replacing fossil fuels generators with zero emission alternatives is not only good for the planet but also provides communities with cleaner air, quieter environments and cheaper, more secure energy,” said Carbon Trust chief executive Tom Delay.
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