As COP28 targets renewable energy surge, can all nations benefit?

• 130 nations at COP28 back tripling of renewables by 2030
• Financing renewable projects harder in developing nations
• Clean energy could help phase out worst-emitting fossil fuels

DUBAI - As Dubai's COP28 U.N. climate summit enters its final week, momentum has grown behind a global target to triple renewable energy such as wind and solar by 2030, with nearly two-thirds of countries putting their weight behind the pledge.

About 130 countries now back the goal which aims to accelerate renewable energy capacity to 11,000 gigawatts (GW) in a bid to speed the world's transition to cleaner power.

"Massive scale-up of renewables is the fastest and most affordable way to put us back on track for 1.5 degrees Celsius," said Bruce Douglas, CEO of the Global Renewables Alliance, an industry group backing the commitment.

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But ensuring renewable capacity is put in place where it is needed most - such as to replace highly polluting coal power or serve growing cities - remains a challenge, particularly in countries investors see as risky, analysts said.

"Tripling needs to happen everywhere," Douglas said, noting that in many developing countries the opportunity exists to more than triple clean power, with poor ones having the potential to "leapfrog fossil fuel generating infrastructure".

Under pre-existing country targets, renewable energy would double by 2030, from nearly 3,400 gigawatts (GW) to 7,250 GW, according to estimates from Ember, a London-based energy think tank.

While COP28 negotiators move ahead on renewables, less progress is being made on other key divisions, particularly whether to include a call to "phase out" or "phase down" fossil fuels including oil and gas in the summit decision.

Coal - which countries agreed two years ago to "phase down" - along with oil and gas are the main drivers of planet-heating emissions.

Who can lead?

While agreement on the need to scale up renewables has emerged at COP28, capacity to do so differs hugely around the world.

Camilla Fenning from E3G, an energy think-tank, said the bulk of the renewables acceleration will come from China - already the world leader in renewables, though it has yet to join the COP28 pledge - along with India, the United States and Europe.

She said growing agreement to boost renewables demonstrated in part how more developing countries see additional benefits from making the energy swap, including better health with less pollution and greater access to affordable energy.

In sub-Saharan Africa, for example, 567 million people lacked access to electricity in 2021, according to the International Energy Agency.

But major barriers remain to poorer countries stepping up renewable power, Fenning added.

"The main issue holding back greater deployment in the Global South is the cost of capital for renewable projects," she said.

Lowering investment risks

In COP28's host country, the United Arab Emirates, the Abu Dhabi Future Energy Company (Masdar) is targeting 100 GW of renewable energy capacity by the end of the decade.

Niall Hannigan, its chief financial officer, said this would be a five- or six-fold increase in capacity.

His company has a track record of developing projects in more "challenging" marketplaces and owns the largest portfolio of operational renewable energy assets in Africa, he said.

Renewable projects need a clear policy framework from government to reassure developers, while grid infrastructure needs to be ready to take on renewable electrical power - something development banks could help finance, Hannigan noted.

"What we hate is uncertainty. Risk is different to uncertainty. Uncertainty is when things change all the time," he told Context in an interview at COP28.

In Rwanda, the government created the Rwanda Green Fund, a vehicle to channel climate finance to help deploy projects including renewable energy such as hydropower.

"We need to catalyse the ecosystem, and so our main role is de-risking," or making projects more attractive to private investment, said Teddy Mugabo, the fund's first female CEO.

She said the fund uses a wide range of tools such as grants, concessional finance and technical support, to help prepare projects and reduce risks.

That includes things like offering zero-interest loans to conduct feasibility studies for hydropower plants, she said.

Even as countries looks to scale up renewables, however, they must keep in mind other goals, such as ensuring sufficient access to energy, which means Rwanda must be "realistic" about its energy mix, Mugabo said.

This includes using methane gas as part of the transition - a fossil fuel but one cleaner than diesel and coal, she said.

"What we're doing is we're not choosing between development and climate, but we want to develop in a climate-compatible way," she said.

Finding the right place

Stephan Nicoleau, managing director at FullCycle, a fund which invests in sustainable infrastructure, said where renewables are built will be crucial for a global energy transition.

A study published in the Environmental Research Letters journal in 2021 found only 5% of the world's power plants accounted for 73% of electricity-based carbon dioxide emissions. All used coal as a fuel.

Replacing such plants is key - but new renewable power needs to be sited in the same places where possible, Nicoleau said.

The latest draft of the Global Stocktake agreement at COP28 includes an option to ensure increased renewable capacity is "strategically implemented to displace fossil fuel-based energy".

Nicoleau said much future energy demand will come in cities, with more than two-thirds of the world population expected to live in urban areas by mid-century.

Siting renewables in and near cities will require creative solutions, analysts say.

For instance, Nicoleau's fund, which plans to deploy about $5 billion in renewables and other "climate critical" infrastructure over the next 10 years, has invested in a company called InPipe Energy which captures energy from pressurised water passing through municipal pipes.

"Finding an opportunity to site those renewables where the power demands will be most acute is probably the name of the game," he said.

Lessons from COVID-19

As more countries try to boost renewables, sharing technology will be key to seeing it scaled quickly, said Rohit Sen, head of sustainable energy at ICLEI, an international NGO.

He said India has been leading calls for greater technology sharing to plug the "big gap" in knowledge and research across the world.

Sen compared the situation to the COVID-19 pandemic, when vaccines were developed in the Global North but sharing with poorer nations was limited.

"The Global South was just left to God's mercy," he said. "It is the same with renewables."

If technology and knowledge do not flow along with money, he said, tripling renewables globally by 2030 "will not happen".

(Reporting by Jack Graham; Editing by Laurie Goering)