The power sector has made record-breaking progress in deploying clean energy in recent years, spurred by falling costs and supportive government policies. At COP28, countries committed to go further and triple renewable energy by 2030, a key milestone on the way to a net-zero-emissions economy. Shifting from fossil-fuel-fired power plants to clean power is at the heart of a just energy transition that will benefit the climate, the economy and human health and wellbeing. Nationally determined contributions (NDCs), the mechanisms by which countries can hold themselves accountable to the Paris Agreement, can support more ambitious emissions reductions targets within the power sector.

Why the Power Sector Matters

The electric power sector is responsible for one-quarter of global greenhouse gas emissions, mainly due to the burning of coal and natural gas. In scenarios that limit global warming to the Paris Agreement’s goal to pursue efforts in line with 1.5 degrees C, the power sector will need to be very different in 2050 than it is today. Indeed, to avoid the worst impacts of climate change, these ambitious pathways require a completely decarbonized power sector by 2050.

Achieving the goals of the Paris Agreement requires the unprecedented scale-up of clean energy to power our homes and businesses. Clean energy for the power sector includes solar, wind, hydropower, geothermal, nuclear, and other zero-carbon electricity sources. Transitioning to clean energy will also require improved energy efficiency as well as demand response and energy storage to help integrate renewable energy into the power grid. The power sector will need to accommodate the growing electricity demand from multiple sectors—such as transport, industry and buildings—as they switch from other energy carriers to electricity. Meanwhile, it is imperative to improve energy access for the roughly one-tenth of the world living without electricity. Governments and utilities alike have the opportunity to show true leadership, by scaling up clean energy supply to meet the projected demand in responsible ways that minimize harmful impacts to people and the planet.

Indeed, in addition to limiting climate change over time, the power sector is crucial for economic, social, human and sustainable development. Providing affordable and reliable power is essential to raising and maintaining decent standards of living. Decarbonization strategies — especially through the use of renewable energy — provide immediate co-benefits that contribute to the United Nations Sustainable Development Goals. These include new jobs, accelerated access to electricity for all, and more resilient electricity — especially in remote and underserved communities — which in turn creates improved livelihoods and economic opportunity supported by affordable and reliable power. Developing countries will also benefit from reduced air pollution and associated health impacts when they switch from fossil fuels to renewable energy.

Falling renewable energy costs, grid modernization, advances in storage technologies and new business models have unlocked the potential to transform power systems more quickly than previously thought possible.

Renewable energy is breaking records for deployment every year, allowing many countries to reduce power sector emissions. The global average levelized cost of solar energy is 29% less than the cheapest fossil-fuel fired electricity, and wind energy is 52% less. The exact comparison varies by country, but according to IRENA renewable energy is cheaper than fossil fuels in all 20 major economies they evaluated, including developing countries like India, Brazil, Malaysia, and South Africa.
Electrification will enable cars, home heating, and other fossil-fuel-dependent activities to dramatically reduce their emissions. Electricity is inherently more energy-efficient than fossil fuels and when powered by renewables can be zero-carbon. Electrification will make the role of the power sector ever more important. Electricity makes up 20% of the world’s total final energy demand, but this will grow to more than 50% in 2050 in a net-zero scenario.
New business models that promote renewable energy deployment, energy efficiency, energy access and local revenue generation can improve power systems’ flexibility and accelerate the transition to affordable and reliable clean energy. Examples include power purchase agreements, community solar, and energy as a service.
Storage technologies are essential for reliability of a decarbonized grid and show huge potential for ramping up deployment and reducing total power system costs. Large deployment of lithium-ion batteries has been driving costs down drastically over the last decade due to economies of scale and technological innovation.

Recent Developments

Countries have joined numerous coalitions or made public commitments related to a transition away from fossil fuels to clean energy. At COP28, countries agreed to triple the world’s renewable energy capacity and double energy efficiency by 2030. For the first time, they also called for a “transition away from fossil fuels in energy systems.” Also at COP28, the Supercharging Battery Storage Initiative was launched.

182 national and sub-national governments, businesses and organizations have joined the Powering Past Coal Alliance in recent years. In addition, the G7 group of countries (Canada, France, Germany, Italy, Japan, the U.K. and the U.S.) have launched Just Energy Transition Partnerships (JETPs) with countries such as South Africa, Indonesia and Vietnam to support the phase-out of coal and transition to clean energy.

How to Incorporate Power-Related Targets in NDCs

Ambitious targets are needed both for the scale-up of clean power and the phase down of fossil-fueled power in the future. The last round of NDCs, submitted in 2020 have quickly become outdated, especially given the plummeting costs and huge investments into renewable energy. The next generation of NDCs, due 2025, offers an opportunity for countries both to reassess the level of ambition of their existing NDCs and to leverage the NDCs to speed up their transitions to clean, reliable and affordable energy for everyone.

New NDCs need to catch up with progress that has already been made and better account for the anticipated trajectory of the power sector. For example, G20 countries are set to reduce power-sector emissions more than their existing NDCs would indicate. Their NDCs should be updated to reflect the current trajectory. However, that’s still not enough. Even though many countries are showing progress with recent policies, they need to go even further to meet more recent commitments made at COP28. Current NDCs of the G20 countries are collectively less than half as ambitious as tripling renewables would require. Furthermore, 184 parties to the Paris Agreement mention renewables in their existing NDCs, but only 113 of those have quantifiable targets that focus on renewable energy in the power sector. Of the NDCs for the 20 biggest fossil-fuel-producing countries, one third made no mention of fossil fuel production at all, and only two countries mentioned a pathway to eventually decrease production.

Addressing these opportunities in NDCs can send transformational signals to move the power sector toward full decarbonization and help plot a course to avoid lock-in of carbon-intensive infrastructure and achieve a clean energy economy. 

Countries can strengthen or include:

  • Economywide GHG targets consistent with net-zero emissions by mid-century, reflecting more ambitious abatement options in the power sector. 
  • Ambitious GHG targets for the power sector, such as:
    • A power-sector carbon emissions target.
    • A power-sector carbon intensity target.
  • Targets to support planning for clean power, such as:
    • Clean energy targets as a share of total electricity generation mix.
    • Clean energy targets aligning with longer-term national plans and national cost-effective clean energy potential.
    • Energy access targets (e.g. through the deployment of decentralized energy solutions).
    • Rooftop solar targets. 
  • Targets to support grid flexibility, such as:
    • Energy storage targets to support renewable energy deployment.
    • Targets for transmission and distribution grid investments.
    • Targets to reduce transmission and distribution losses.
    • Targets for smart meter deployment and forecasting technologies to predict real-time output of variable renewable energy generation.
  • Targets and commitments to address existing fossil fuel assets, such as:
    • Fossil fuel (e.g. coal or natural gas) phase-out targets for the power sector, coupled with just transition plans to support fossil fuel workers and communities.
    • Commitments to no new added traditional fossil-fuel-fired capacity after current projects under construction are completed.
    • Air quality targets related to the power sector.
  • Targets to promote universal energy access.
  • Targets to address integration with end-use sectors such as buildings and transport.
Additional Resources

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