RE could raise global GDP by $1.3tn by 2030

Global GDP will rise roughly 1.1% if renewables account for 36% of the world’s energy mix by 2030, the International Renewable Energy Agency (Irena) said this week.

In November, Irena said that the rise of global temperatures can be limited to less than 2 degrees Celsius if renewables account for 36% of the world’s total energy mix by 2030.

If global GDP rises by approximately $1.3tn over the next 15 years — more than the combined economies of South Africa, Chile and Switzerland — the number of jobs in the international renewable-energy sector would also jump from 9.2 million at present to more than 24 million, according to Irena’s Renewable Energy Benefits: Measuring the Economics report, which estimates the macroeconomic impact of doubling the share of renewable energy throughout the world from 2010 levels.

The recent climate agreement in Paris is now driving countries to begin decarbonising their energy sectors, said Irena director-general Adnan Amin.

“This analysis provides compelling evidence that achieving the needed energy transition would not only mitigate climate change, but also stimulate the economy, improve human welfare and boost employment worldwide,” he claimed.

The report — released last week at Irena’s sixth assembly in Abu Dhabi — claims that Japan would be most impacted by this shift, with national GDP estimated to rise 2.3% through 2030.

However, GDP in Brazil, Germany, Australia, Mexico, South Africa and South Korea would also rise more than 1% if the world ramps up the global share of renewables to 36% over the next 15 years.

Irena argues that the global shift to renewables could more than halve international imports of coal, while also slashing oil and gas imports, which could help the European Union and import-reliant nations such as Japan and India.

In a separate announcement it emerged that four renewable energy projects in Africa and the Caribbean have been granted $46m in concessional loans by Irena and the Abu Dhabi Fund for Development (ADFD).

Irena says the loans will result in nearly 12MW of new renewables capacity, will reduce emissions, create jobs, and electrify rural communities which don’t have access to modern energy services.

The loans will be used to fund a 4MW wind and solar project in Antigua and Barbuda which will receive $15m; a 3.6MW solar PV mini-grid project in Burkina Faso will get $10m; a 2MW hybrid solar PV and wind project in Cabo Verde will receive $8m; and a 2MW solar project in Senegal will get $13m.

The projects are funded through the Irena/ADFD project facility, which is committing some $350m to increase the deployment of renewables in developing countries. So far the facility has allocated $144m in project funding over its first three cycles.

“While renewable energy resources are abundant in many developing countries, adequate finance can still be a barrier to deployment,” says Amin. “Irena and ADFD’s pioneering partnership contributes to overcoming this challenge, by selecting innovative projects for concessional funding.”