Renewable energy in climate change adaptation: METRICS AND RISK ASSESSMENT FRAMEWORK © IRENA 2025 Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be se ...

Renewable energy in climate change adaptation: METRICS AND RISK ASSESSMENT FRAMEWORK © IRENA 2025 Unless otherwise stated, material in this publication may be freely used, shared, copied, reproduced, printed and/or stored, provided that appropriate acknowledgement is given of IRENA as the source and copyright holder. Material in this publication that is attributed to third parties may be subject to separate terms of use and restrictions, and appropriate permissions from these third parties may need to be se ...

Investment Rating - The report emphasizes the need for an estimated investment of USD 183.85 million to integrate decentralized renewable energy (DRE) solutions across five priority agricultural value chains in Malawi [23]. Core Insights - The agricultural sector in Malawi faces significant energy challenges, with high demand for DRE solutions identified across various value chains, including olericulture, dairy, rice, legumes, and aquaculture [15][18]. - The study highlights that many smallholder farmers are willing to pay for DRE solutions if the economic benefits are clearly communicated, indicating a strong market potential for these technologies [20]. - DRE technologies can significantly enhance productivity, reduce post-harvest losses, and improve food security, thereby contributing to the economic growth of Malawi [22][24]. Summary by Sections Executive Summary - Access to reliable energy is a critical challenge in Malawi, particularly in rural areas, which constrains agricultural productivity [15]. - The government has prioritized renewable energy to diversify energy sources and drive rural electrification [15][16]. - The report presents findings from a feasibility study on deploying DRE technologies in selected agricultural value chains [17]. Country Context - Agriculture is vital to Malawi's economy, accounting for 23% of GDP and employing about 77% of the workforce [44]. - The reliance on rain-fed systems leads to food shortages, highlighting the potential for DRE solutions to enhance agricultural productivity [45][46]. Methodology - The assessment involved a multi-stakeholder process, including desktop reviews, stakeholder consultations, and data collection to identify opportunities for DRE integration [53][54][55]. Mapping Energy Needs - The report identifies specific energy demands at each stage of agricultural value chains, allowing for targeted DRE interventions [73]. - Key agricultural value chains analyzed include olericulture, dairy, rice, legumes, and aquaculture, each with distinct energy requirements and potential for DRE solutions [73]. Recommendations - A coordinated approach is recommended to boost DRE implementation, including tax incentives, subsidies, and the establishment of a "Green Finance Facility" [28][29]. - Development partners should support DRE demonstration projects and provide capacity-building for farmers [29][30]. - Financial institutions are encouraged to create tailored financial products for DRE solutions, facilitating access for smallholder farmers [30]. Investment and Scaling Potential - The report outlines the required investments for each value chain, with specific amounts allocated for DRE solutions targeting cold chain, processing, and irrigation [26]. - The potential market size for DRE in agriculture is projected to be around USD 185 million, indicating significant opportunities for investment [66].

Investment Rating - The report does not explicitly provide an investment rating for the aluminium industry. Core Insights - The aluminium industry is projected to increase production by over a third by 2050, leading to rising emissions unless decarbonisation measures are implemented [20][88] - Aluminium production accounted for approximately 1.1 gigatonnes (Gt) of CO2 emissions in 2022, primarily due to reliance on fossil fuels [19][67] - The integration of renewable energy sources such as solar and wind is essential for reducing the carbon footprint of aluminium production [21][22] - The report emphasizes the need for a supportive policy environment to accelerate the transition towards low-carbon aluminium [30][32] Summary by Sections Executive Summary - Aluminium is crucial in various industries but significantly contributes to climate change, with emissions projected to rise without decarbonisation efforts [19][20] - The report outlines the role of renewable energy and other levers to reduce emissions in the aluminium sector [20][28] Introduction - The aluminium market was valued at approximately USD 160 billion in 2022, with over 7 million jobs supported globally [39] - The report discusses the environmental impact of aluminium production, which emitted over 1.1 billion tonnes of CO2 equivalent in 2022 [39][67] Transformation Pillars: Towards Net Zero in the Aluminium Sector - The report identifies three key pillars for decarbonisation: increasing low-carbon electricity sources, eliminating direct emissions, and maximizing recycling [89] - It highlights the importance of integrating renewable energy into smelting processes to significantly reduce emissions [95][102] Recent Progress and Key Actions - Several aluminium producers are already integrating renewables into their operations and participating in research and development initiatives [28][29] - The report calls for collaborative efforts among governments, producers, and other stakeholders to achieve decarbonisation goals [29][30]

Investment Rating - The report indicates a strong positive outlook for the renewable energy sector, highlighting significant growth and potential for future investments [13][15]. Core Insights - By the end of 2024, renewable energy sources accounted for 46% of global installed power capacity, with a record addition of 585 gigawatts (GW) in 2024, marking a 15.1% increase [14][15]. - Solar power was the leading contributor, with over 452 GW added, representing more than three-quarters of the total renewable additions [15]. - The report emphasizes the need for accelerated growth to meet the target of tripling installed renewable power capacity to 11 terawatts (TW) by 2030, requiring annual additions exceeding 1,120 GW [17][18]. Summary by Sections Total Capacity - The global renewable energy capacity reached 4,448,051 megawatts (MW) by the end of 2024, showing a consistent upward trend from previous years [64]. Renewable Energy Breakdown - Hydropower, wind energy, and solar energy are the primary contributors to the renewable capacity, with significant growth observed in solar photovoltaic installations [19][15]. Regional Insights - Major contributors to new renewable capacity in 2024 included China, the United States, and the European Union, which collectively accounted for 489 GW (83.6%) of the total new installations [16]. - In contrast, Africa's contribution was minimal, with only 4.2 GW (0.7%) added, highlighting disparities in renewable energy deployment [16]. Future Outlook - The report calls for a much faster pace of growth in renewable energy installations to achieve a sustainable energy future and meet global climate goals [18].

Investment Rating - The report does not explicitly provide an investment rating for the sustainable aviation fuels (SAF) industry in Southeast Asia Core Insights - The SAF industry in Southeast Asia is still in its infancy, with a current global production capacity of less than 1% of global aviation fuel usage, highlighting the need for significant investment and policy support to scale production [45] - The uneven distribution of feedstock resources among Southeast Asian countries presents challenges for self-reliance in SAF supply, with resource-rich countries like Indonesia positioned as key exporters [25][79] - The development of SAF is influenced by various factors, including feedstock availability, technological readiness, and government policies, which vary significantly across the region [76][101] Summary by Sections Feedstock and Land Resources - The potential for energy crops on under-utilised low-carbon land in Southeast Asia is significant, with estimates suggesting that allocating 9% of such land could yield up to 18.4 million tonnes per year of SAF, nearly meeting the region's projected demand [17] - Countries like Indonesia and Myanmar show the most potential for SAF production from energy crops, while others may struggle to meet demand using only domestic residues and wastes [4][17] Production Pathways - The report focuses on three main SAF production pathways: HEFA, FT, and ATJ, with HEFA expected to be the most widely used due to its established technology and lower capital expenditure [27][41] - The minimum jet fuel selling price (MJSP) for SAF varies across Southeast Asia, with HEFA ranging from USD 1.6 to 2.1 per litre, significantly higher than the fossil-based Jet A-1 price of USD 0.6 per litre [69][39] Policy Development - Several Southeast Asian countries, including Singapore, Malaysia, and Indonesia, have initiated SAF roadmaps or blueprints, with Singapore being the first to establish a mandate for SAF use [76][44] - The report emphasizes the need for harmonization of policies across different ministries in countries like Malaysia to accelerate SAF development and align targets [85] International Trade and Investment - International investments play a crucial role in the SAF sector, with partnerships like that of Prime Infrastructure Capital and WasteFuel Global in the Philippines highlighting the importance of foreign capital for scaling production [95] - The report suggests that a coordinated regional framework for SAF production and trade could help balance competition and foster sustainability across Southeast Asia [100][96]

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - Renewable hydrogen and its derivatives, such as ammonia, methanol, and e-kerosene, are projected to play crucial roles in the energy transition, particularly in hard-to-abate sectors, accounting for approximately 14% of final energy consumption by 2050 [15][22][24]. - The development of international markets for renewable hydrogen and its derivatives is essential for enhancing competitiveness and reducing costs by facilitating production in regions with abundant renewable resources [16][18]. - Significant infrastructure investments, including pipelines and shipping facilities, are necessary to support the transport of these commodities from producers to consumers [17][68]. Summary by Sections Executive Summary - Renewable hydrogen and its derivatives are expected to be vital in decarbonizing hard-to-abate sectors, with their use projected to account for around 14% of final energy consumption by 2050 [15][22]. - Cost variations in renewable hydrogen production will depend on geographic conditions, creating opportunities for both exporting and importing countries [16]. Introduction - The report emphasizes the importance of renewable hydrogen in sectors that cannot be easily electrified, such as chemical manufacturing and heavy-duty transport [22][23]. - Current hydrogen production is primarily fossil-fuel-based, contributing significantly to emissions, necessitating a transition to renewable sources [23]. Market Overviews - Global hydrogen production is around 95 million tonnes per year, with a significant portion derived from fossil fuels, leading to approximately 1.3 gigatonnes of CO2 emissions annually [36]. - The ammonia market is projected to reach 688 million tonnes by 2050, driven by renewable ammonia applications in agriculture and maritime fuels [46]. - Methanol production is currently dominated by fossil fuels, with global imports valued at USD 12.1 billion in 2023, while renewable methanol production remains in its infancy [58]. - Kerosene trade is substantial, with global imports exceeding USD 500 billion in 2023, highlighting its importance as a jet fuel [66]. Enablers - The report categorizes enablers into physical, institutional, and social measures necessary for scaling up international markets for renewable hydrogen and its derivatives [30]. - Physical enablers include the deployment of infrastructure for production, storage, and distribution of renewable hydrogen and its derivatives [31][68]. - Institutional enablers focus on policy measures such as tariffs, taxation, and carbon pricing to support market development [32]. - Social enablers emphasize community engagement and job creation associated with the development of these markets [33].

Investment Rating - The report emphasizes the urgent need for increased investment in renewable energy and energy efficiency to meet global climate targets, specifically highlighting a requirement of USD 4.3 trillion annually until 2030 and USD 5 trillion per year until 2050 [52]. Core Insights - The report outlines the imperative to triple renewable power capacity and double energy efficiency improvements by 2030, as established during COP28 [29][51]. - In 2023, global renewable capacity additions reached 473 gigawatts (GW), driven primarily by solar photovoltaic (PV) and wind power technologies [29][61]. - Despite progress, the current pace of deployment is insufficient to meet the 2030 targets, indicating a potential shortfall of 1.5 terawatts (TW) or 13.5% below the tripling goal if the 14% increase in installed capacity continues [35][63]. Summary by Sections Executive Summary - The UAE Consensus from COP28 calls for a transition away from fossil fuels and emphasizes the need for ambitious climate action to meet the Paris Agreement goals [29][52]. - The report highlights that 130 countries signed the Global Renewable Energy and Energy Efficiency Pledge, indicating a collective commitment to renewable energy [29]. Progress Toward Tripling Renewable Capacity by 2030 - Africa added approximately 2.7 GW of new renewable capacity in 2023, totaling over 62.1 GW, but only 43% of African countries made progress [30]. - Asia and the Pacific saw a significant increase of 339 GW in renewable power capacity, with China being the largest contributor [31]. - Europe added around 70 GW of renewable power capacity, reaching a total of 785.8 GW in 2023 [32]. - Latin America and the Caribbean recorded a rise of 24 GW, totaling 308.2 GW in renewable power capacity [32]. - Small island developing states (SIDS) increased their cumulative renewable power capacity to 8.7 GW in 2023 [33]. Ambitions and Directions Towards 2030 and Beyond - The report stresses the need for countries to enhance their Nationally Determined Contributions (NDCs) to align with the more ambitious energy transition targets [36]. - IRENA's engagement with 101 countries aims to support the enhancement and implementation of NDCs, focusing on the energy sector [37][39].

Investment Rating - The report emphasizes the urgent need for a course correction in the global energy transition to meet the 1.5°C climate goal, indicating a critical investment environment for renewable energy and efficiency improvements [9][12]. Core Insights - The global energy transition is currently off track, with fossil fuels still dominating the energy mix in major economies, making it increasingly unlikely to meet the Paris Agreement goals [40][41]. - Significant investments are required to triple renewable power capacity to over 11,000 gigawatts by 2030, necessitating a total of USD 31.5 trillion in investments from 2024 to 2030 [12][72]. - The report highlights the need for international collaboration to ensure a just and equitable energy transition, particularly in the global South, where investment is critically needed [14][20]. Summary by Sections Chapter 1: Achieving the 1.5°C Scenario and Net-Zero Emissions by 2050 - The report outlines a framework for aligning energy and climate strategies, emphasizing the need for systemic transformation to achieve net-zero CO2 emissions by mid-century [6][7]. - It identifies a significant gap between high-level political commitments and actual national plans, with current targets set to deliver only half of the required growth in renewable power by 2030 [41][42]. Chapter 2: Progress Towards 2030 Milestones - The report notes that while renewable power capacity grew by 473 gigawatts in 2023, deployment must increase to an average of 1,044 gigawatts annually to meet the tripling target by 2030 [53][54]. - It stresses the importance of expanding renewable energy beyond leading markets and scaling up technologies other than solar PV [54]. Chapter 3: Overcoming Key Barriers - Structural and systemic barriers must be addressed to facilitate the energy transition, including modernizing infrastructure and establishing regulatory frameworks suitable for renewable energy [10][60]. - The report highlights the need for effective energy planning to attract private capital and reduce investment risks [18][76]. Chapter 4: Overcoming Finance and Investment Barriers - Global investments in renewable capacity reached USD 570 billion in 2023, but remain concentrated in a few countries, necessitating a dramatic increase in financing to meet energy transition goals [71][72]. - Annual investments must rise from USD 1.29 trillion in 2023 to USD 4.5 trillion each year from 2024 to 2030 to meet the renewable energy and efficiency goals [72][73]. Chapter 5: Furthering Economic and Social Development - The report emphasizes the socio-economic impacts of the energy transition, advocating for international collaboration to enhance welfare outcomes [20][43]. - It calls for a focus on public financing and policy measures to de-risk investments in high-risk environments, particularly in developing countries [75][77].

Investment Rating - The report does not explicitly provide an investment rating for the green hydrogen industry Core Insights - The urgency for decarbonization across all sectors by 2050 necessitates the use of hydrogen, particularly in hard-to-abate sectors, with green and blue hydrogen production needing to reach 125 million tonnes per year by 2030 and 523 million tonnes by 2050 [60][61] - A robust Quality Infrastructure (QI) is essential for the sustainable development of the green hydrogen sector, ensuring quality, safety, and sustainability of products and services [60][62] - The report outlines a roadmap consisting of five steps for countries to develop their QI to support the green hydrogen sector, focusing on assessing potential, developing national strategies, and creating action plans [63][64] Summary by Sections 1. Introduction - The transition to clean energy requires innovative approaches to prevent greenhouse gas emissions, with green hydrogen being crucial for achieving net-zero emissions in hard-to-abate sectors [79][80] 2. Developments in the Global Hydrogen Market - By 2050, green hydrogen could account for 14% of the world's final energy consumption, necessitating a production increase to 125 million tonnes by 2030 and 523 million tonnes by 2050 [102] - The cost of renewable hydrogen production is driven by renewable electricity costs and the cost of electrolysis plants, with significant potential for cost reductions through economies of scale [104] 3. Quality Infrastructure: Creating the Basis for Sustainable Development - Quality infrastructure includes metrology, standardization, accreditation, and conformity assessment, which are essential for ensuring safety and sustainability in the hydrogen sector [120][121] - The national QI system must be coherent and functional, integrating various components to support the development of quality services [133] 4. Quality Infrastructure Services for Green Hydrogen - The report provides an overview of quality infrastructure services along the green hydrogen value chain, emphasizing the need for standardization, metrology, and testing [19][20] - A checklist of services for each quality infrastructure pillar is included to guide policymakers and industry stakeholders [72] 5. Quality Infrastructure Roadmap for Green Hydrogen - The roadmap consists of five steps: assessing potential, developing a national hydrogen strategy, assessing the national QI system, evaluating service offerings and demand, and creating a development action plan [63][64] - The application of the roadmap was piloted in Tunisia, highlighting the importance of national strategies in developing a robust QI ecosystem [93]