Resources for Strengthening Climate Action: Power Sector
The power sector is the largest source of energy-related greenhouse gas emissions--the leading cause of climate change. Achieving the goals of the Paris Agreement means bringing clean energy online to power our homes and businesses at unprecedented scale, all while supporting greater demand for electricity as end-use sectors (e.g., transport, industry, buildings) electrify and energy access improves.
Read the full working paper: Enhancing NDCs: Opportunities in the Power Sector
Why the Power Sector Matters
In 1.5⁰C-consistent scenarios, the electric power sector will be very different in 2050 than it is today: indeed, most such pathways rely on a completely decarbonized power sector by 2050 in order to avoid the worst impacts of climate change.
The electric power sector is also crucial for economic, social, human and sustainable development. Providing affordable and reliable power is essential to raising and maintaining decent standards of living. Fortunately, there are many synergies between decarbonizing power supply and the United Nations Sustainable Development Goals. In addition to limiting climate change over time, decarbonization strategies – especially through the use of renewable energy — provide immediate co-benefits. These include employment generation, accelerated energy access for all, economic and social development in remote areas, and improved resilience. Especially in developing countries, reduced air pollution and associated harmful health impacts can be a serious motivator to move away from coal-generated electricity.
Opportunities within the Power Sector
Falling renewable energy costs, grid modernization, advances in storage technologies and new business models have unlocked the potential to transform power systems in ways that seemed improbable just five years ago.
|Renewable energy has started to compete directly with fossil fuel-based power generation as solar and wind are now the cheapest source of new electricity for at least two-thirds of the world's population|
|Electrification The world’s pathway to a sustainable energy sector foresees electricity’s share of final energy demand growing from less than a fifth to nearly half in 2050 (IRENA 2019), delivering 60 percent of the required energy-related CO2 emissions reduction.|
|New business models that promote renewable energy deployment, energy efficiency, energy access, and local revenue generation can improve the power system’s flexibility and accelerate the transition to affordable and reliable clean energy|
|Storage technologies are essential for reliability of a decarbonised grid, and show huge deployment and cost reduction potential. Large deployment of lithium ion batteries has been driving costs down drastically over the last decade.|
|Digital technology for the power grid amplifies system transformations between the transport, buildings and power sectors and unleashes economic opportunities. By 2025, annual revenue from energy digitalization will be $64 billion, up from $54 billion today (Bloomberg 2017).|
Today, in light of the global COVID-19 outbreak, countries can capitalize on these developments and advance economic recovery at the same time. For example, Nigeria’s COVID-19 stimulus package includes spending $619 million on a solar home systems project that aims to provide access to solar and mini-grids for five million households without power. The United Kingdom, meanwhile, announced $3.7 billion to support energy efficiency improvements, including subsidies to homeowners and landlords to make their homes more energy efficient and funding for energy efficiency and low-carbon heat upgrades in public sector buildings. These types of interventions will ultimately lay the groundwork for both a strong economic recovery and for more ambitious NDC commitments.
Ways to Enhance Nationally Determined Contributions (NDCs) in the Power Sector
The evolving renewable energy industry is an opportunity for countries both to reassess the level of ambition of their initial NDCs and to leverage the NDCs to speed up needed transitions in the sector. Addressing these opportunities in the NDCs can send transformational signals to global industry and relevant stakeholders to move the power sector toward full decarbonization and catalyze holistic planning, to avoid lock-in of carbon-intensive infrastructure.
Countries can strengthen or add:
- Economywide GHG targets reflecting more ambitious abatement options in the power sector.
- Ambitious GHG targets for the power sector, such as:
- A power-sector carbon-intensity target.
- A coal plant emissions-reduction target.
- Targets to support planning for renewables, such as:
- Renewable energy targets as a share of total electricity generation mix.
- Renewable energy targets aligning with longer-term national plans and national cost-effective renewable 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 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) phase-out targets for the power sector, coupled with just transition plans.
- Commitments to no new added traditional fossil-fuel-fired capacity after current project pipeline.
- Air quality targets related to the power sector.
- Targets to address integration with end-use sectors such as buildings and transport.
Countries can link COVID recovery to stronger climate action:
Power Sector in First Round NDCs
The graph below shows the different power-related targets, policies and measures that countries included In their initial NDCs.
The most common target is renewable energy as a share of the power or energy mix, followed by targets for renewable energy installed capacity, and investment commitments for renewable power. policies and measures focus on the growth of solar energy and improvements in power-generation efficiency