“We like to talk about renewables as a holistic system.”: Francesco La Camera on IRENA’s World Energy Transition Outlook.
In this episode of Cleaning Up, Michael Liebreich talks to Francesco La Camera, Director-General of IRENA (International Renewable Energy Agency).
Michael and Francesco begin by discussing IRENA’s inner workings and the IRENA’s World Energy Transition Outlook reports.
Finally, Francesco gives his opinion on the impact of Russia’s invasion in Ukraine.
This is an abridged transcript of the conversation, edited for clarity.
Michael Liebreich: Francesco, could you start by giving us a description of IRENA?
Francesco La Camera: IRENA is an intergovernmental entity. It is an agency now having 167 member countries. It's a global organisation. We have most other 20 countries in accession. So, more or less the same membership of the UN. We are the only intergovernmental entity that is global, dealing with energy and focusing on the energy transition based on renewables. IRENA was established 10 years ago. The first focus was to make the case for renewables going deeper in the knowledge base product, making clear how renewables could be competitive. We support countries in their planning, just to give a number in the way to the COP 26, we have supported 72 countries in preparing the indices. We have also started to work on scenarios after Paris with our global energy transformation. Then we move to, first to the Renewable Outlook that we published two years ago. Then we went to the energy transition outlook, the first edition was in 2021. And the second that has been published in the occasion of the Berlin Energy Transition Dialogue at the end of March. What is important is that in this scenario, to be clear, we are not making forecasts, we produce scenarios. What we do is work on the technologies, on the policies needed on the socio-economic impacts to get to certain result and naturally the guides for us are the Paris Agreement goals. The 1.5 and this is more or less our work. Now we are also trying to make a practical use, if we can use the word practical, our knowledge base, our support in the planning for moving on to the ground and also facilitating the matching between the project and funding through two initiatives. One is the Climate Investment Platform that we have launched together with the UNDP and in collaboration with the Green Climate Fund. Now with a new facility, the energy transition accelerated financing. So ETF, that is an umbrella, we have been seeing the UAE committing $400 million through the Abu Dhabi Fund for Development. But we are also financial analyst agreement with other entities. We really hope that this umbrella may leverage 1 billion, more than 1 billion per year. These are our goals.
ML: I would say from my perspective, as a close spectator around that time, some parts of it was frustration, at the time that the IEA was not really focusing on renewable energies. That is the period when the IEA was suggesting they would become less than 1% of electricity forever because they were so expensive. I was very vocal, one of the very vocal people saying, this is ridiculous. It is a self-fulfilling prophecy. Because if you say renewables will never be anything, then which sensible politician or entrepreneur or financier or corporation would really put a lot of weight behind renewables? There was a lot of frustration at the time with the IEA, which, of course, today is singing a very different song. Has the original need for IRENA grown or been reduced since then?
FLC: I think that the agency has been able to make the case for renewables. The confidence in our data and our report is transforming the sense of going for the renewal into a new culture, that now it’s a culture that everyone is trying to work on it. So naturally, we have been working and say very clearly that the new energy system was going to be based largely on renewables. Dominated by renewables, and complemented by antigen, mainly green, and sustainable biomass bioenergy. We have been the first to say that we are happy that others are finally joining in on this. But at the same time, we are the ones that developed the methodologies, the models, the instruments, for going from the narrative to the concrete life. Offering concrete solutions, concrete options to our membership is not by chance that we have been the urgency and trusted by Africa to work on their continual plan. So why? Because we have the models and instruments that have been tailored to manage energy transitions and modelling reality in a way that is closer to reality itself. We have now been able to work on planning our world and this transition outlook is going to move to regional energy transition outlook, and transition outlook for the very big countries that may look like a continent. And this has been recognised and supported by the European Commission, and others. I think that naturally now there is a more mutual understanding of what could be the future energy system. But I think that the reason for having IRENA is increasing every day, because we are not, we are now in the best position in my point of view, to offer concrete solutions for the acceleration of the initial transition.
ML: Okay, that includes that includes large hydro, of course, which is not growing at all.
FLC: We like always to talk about renewables as a holistic system. In our scenario it is supposed to be 90% of the electricity generation in 2015. The share of renewables in final energy consumption today is around 16%. And will be 79%. So, 80% in 2050. These are our numbers. We launched it in our last World Energy Transition Outlook, that we are really risking losing the 1.5 perspective, shortly, or even the two degrees perspective, if we do not change dramatically, the way we produce and consume energy. That is where we are. We think that it is still possible. The numbers show that the universe has been breaking records after years of not getting at the speed that is needed. We must balance what the private can do with the investment because we need the private to go for that. We also must be very clear about what the public can do. The public can work on the grids, surely flexibility. Ensuring interconnectivity and ensuring balancing of the system is particularly important to have so the public must work with that the public has to work on building a demand for hydrogen and green hydrogen. They must finally adapt to the legal environment that was fitting in all systems that had a centralised fossil fuel system to a decentralised system based on renewables. This means that also the legal aspect of the market must be tortured and renewed. When we talk about the business model that must be changed. We are trying to move to a different use of hydropower, trying to work on the big load trying to work on feeding hydrogen, but the risk is that losing the base load function can also bring for a less use of the hydropower energy cell. We have to work for a modern market that will ensure that the profitability of the ultra-hydropower remains. So, there are things that has to be changed and the way that we organise and regulate rules the contracts. So the legal environment, business model, all these aspects must be public, if we all do this, and if we also work on an international cooperation, to be more effective, and focusing on the things that need to be done. We must hope that we can to and reach and achieve the Paris Agreement goals. Naturally, the is difficult. But I think that it’s still possible.
ML: There's a lot that you say there that I endorse entirely. We have this situation, it looks like, at the same time as everything you talked about in your World Energy Transition Outlook. The world is also now trying to get off Russian oil and gas on an accelerated timeframe. Now, does that speed up the transition by reinforcing the need to get off oil and gas? Or does it slow it down by distracting everybody, and forcing them to invest in oil and gas in friendly nations? Because now, it's no longer acceptable to buy it from Russia. There's more investment going to happen domestically in the US, Canada, the UK, and around the world? Are we going to be putting that money into oil and gas and potentially locking ourselves in? Ukraine conflict: accelerator or decelerator of the transition?
FLC: That's a very good question. In the short term, it may have an impact and not a positive impact. But immediately after, I think that it could really be an accelerator of the move to the energy transition. We must be careful on this. Much depends on the policies that governments will put in place. We were talking, for example, about COVID. Now we have to spend the money to recover in a way to accelerate the transition. The fact is that the money spent for recovering from COVID, less than two digits, so less than 10% went to the energy transition. And we all agree that we must link the short term to the lamp term response. Here, I think that the chance that we can go for an acceleration or transition is more evident. And because government also where there was not a strong climate on or environmental approach to the transition, now, they look also to decide over the energy security. We are naturally investing in renewables may provide more dependencies, that is what we wrote in the report there. How the origin of renewables can play an important role in having less dependency on other countries. Today 80% of our countries are net importers of oil and gas, 80%. And naturally, they are dependent. But we have seen this over the years, from when I was studying in the university that the price of fossil fuel has been already impacting on the way the economies were working. There is a big understanding that going for debts may show to be more resilient to different kinds of shocks. This will be really another, adding reasons to speed up. So not only the climate aspects, and we also say that it is not only climate because it is also economy, we will have more GDP, it is more social impact, we will have more jobs, we can each transition or you can have more resilience in the energy system. This could be another strength for accelerating the path.
ML: Okay, thank you. So short term, Ukraine does distract a bit of attention and financial flows, but in the medium and longer term, then you see the two not just for that, not just for climate, but for resilience reasons and all the social reasons, you see the two acting together.
FLC: The fact is that more people are realising that going for a new renewable energy, new energy system based on renewables and complementary, as we say, by hydrogen and green hydrogen mainly and sustainable biomass will ensure more resilience and supporting economic growth in employment. So, I think now, we are all close to being convinced that that is the way.