Seizing the

moment of
opportunity

Supercharging the
new energy era of
renewables, efficiency,
and electrification
 Acknowledgements ii

Acknowledgements

This report was written by the Climate Action The report also benefitted from data provided by
Team in the Executive Office of the United Nations the International Energy Agency (IEA) and Ember;
Secretary-General. Ploy Achakulwisut served as and from review comments in various sections by
the lead author. The following United Nations Carolina Aguirre Echeverri, Amar Bhattacharya
(UN) agencies and other intergovernmental (Brookings Institute), John Christensen (CONCITO),
organizations provided inputs, data, and reviews: Jeffrey D. Sachs (Columbia University), Lisa E. Sachs
International Labour Organization (ILO — (Columbia University), and Trevor Sutton (Columbia
Moustapha Kamal Gueye, Marek Harsdorff, Camila University).
Pereira Rego Meireles); International Monetary
Fund (IMF — staff of FADCP, RESSC, and SPRCD The report was edited by Richard Anderson
divisions); International Renewable Energy and designed by the UN Department of Global
Agency (IRENA — Deborah Ayres, Ute Collier, Norela Communications, with support from the UN
Constantinescu, Saied Dardour, Francis Field, Ricardo Cartography Unit.
Gorini, Diala Hawila, Rodrigo Leme, Julian Prime,
Mirjam Reiner, Anke Schoenlau); UN Trade and Recommended citation:
Development (UNCTAD — Chantal Line Carpentier, United Nations. Seizing the moment of opportunity:
Claudia Contreras, Hamed El Kadi Stephania Supercharging the new energy era of renewables,
Mageste, Tansug Ok, Amelia U. Santos Paulino); efficiency, and electrification. New York. (2025).
UN Development Programme (UNDP — Jennifer
Baumwoll, Cassie Flynn, Chibulu Luo, Riad Meddeb, The report can be accessed online at
Stefano Pistolese, Mateo Salomon); UN Environment un.org/en/climatechange/moment-opportunity-2025
Programme (UNEP — Lakshmi Bhamidipati, Patrick
Blake, Luciana Fontes De Meira, Minhyuk Hong,
Aaree Kim, Martin Krause, Anne Olhoff, Gabriela
Prata Dias, Lily Riahi, Himanshu Sharma, Marie-
Blanche Ting, Sara Trærup, Vera Weick, Ruth
Zugman Do Coutto); Organisation for Economic
Co-operation and Development (OECD — Geraldine
Ang, Sirini Jeudy-Hugo, Elisa Lanzi, Virginie Marchal,
Deger Saygin); World Bank (David Groves); and
World Meteorological Organization (WMO —
Roberta Boscolo, Britney Shaw).
Table of contents

Acknowledgements................................................................................................................. ii

Executive summary................................................................................................................ 01

Section 1 — Introduction.................................................................................................... 04

Section 2 — The energy transition today: Progress since Paris............ 06

Section 3 — Opportunities and benefits of accelerating

the energy transition............................................................................................................. 16

Section 4 — Barriers and challenges of the current transition............ 23

Section 5 — Seizing the moment of opportunity.............................................. 30

Annex: Data and terminology......................................................................................... 33

References...................................................................................................................................... 34
  Executive summary 01

Executive summary

We stand at a unique and defining moment in Solar and wind are now almost always the least
history. In the ten years since the Paris Agreement expensive — and the fastest — option for new
was adopted, renewable energy technologies have electricity generation. Between 2010 and 2022,
undergone a remarkable transformation. With solar and wind power became cost-competitive
spectacular cost declines and manufacturing capacity with fossil fuels without financial support in many
growth, the global deployment of solar, wind, and countries. By 2023, an estimated 96% of newly
electric vehicles (EVs) has exceeded even the most installed, utility-scale solar photovoltaics (PV)
optimistic projections and continues to advance and onshore wind capacity had lower power
exponentially (Figure ES1). The world is poised generation costs than new coal and gas plants,
for a breakthrough in the rapid and widespread while around 75% of new wind and solar PV
transition from energy systems dominated by fossil plants offered cheaper power than existing fossil
fuels to those dominated by homegrown, low-cost fuel facilities globally. In 2024, the global average
renewables. However, seizing this moment of electricity generation cost from solar PV was 41%
opportunity is not a given as significant political cheaper, and onshore wind 53% cheaper, than the
and economic barriers and obstacles remain. least-cost new fossil fuel-fired power plant, with
solar PV reaching USD 4.3 cents per kilowatt-hour
This special report provides a high-level synthesis (kWh) and onshore wind USD 3.4 cents/kWh. On
of the state of play of — and the economic average, project lead times for solar PV and onshore
imperative and opportunity for — accelerating the wind are one to three years (less for small-scale
transition away from fossil fuels to clean energy, solar), whereas coal- and gas-fired power plants can
with a particular focus on the roles of renewables, take up to five years or more and nuclear power
electrification, and energy efficiency.i plants 10–15 years.

Figure ES1. Rapid cost declines and growth in installed electricity capacity of solar and
wind technologies globally, 2010–2024.

Solar PV CSP Onshore wind Offshore wind

50 2000 50 12 1200

20 80
6
40 40
1500 9 900
Installed capacity (GW)
Cost (USD cents/kWh)

15 60

30 30
4
1000 6 600
10 40
20 20

2
500 3 300
5 20
10 10
Capacity

Cost
0 0 0 0 0 0 0 0
2010 2015 2020 2025 2010 2015 2020 2025 2010 2015 2020 2025 2010 2015 2020 2025

Data source: IRENA.1 (The cost shown represents the levelized cost of electricity; CSP = concentrated solar power.)

i See Annex for the definitions of renewable energy and clean energy used in this report.
 Executive summary 02

The plummeting costs mean that solar and wind the costs of heating, cooling, lighting, and mobility,
have become the fastest growing sources of and indirectly pushed up the costs of other goods
electricity in history, and growth in renewable and services throughout global supply chains,
energy is now outpacing that in fossil fuels in the exacerbating the cost-of-living crisis in 2022. On
power sector. In 2024, renewables made up 92.5% average, consumers worldwide spent 20% more on
of all new electricity capacity additions and 74% energy bills than the previous five-year average; the
of electricity generation growth. Between 2015 and increase was much greater for consumers living in
2024, global annual electricity capacity of renewables countries with high gas import reliance.
increased by around 2,600 gigawatts (GW) (140%),
while that of fossil fuels increased by around 640 GW Centralized and decentralized renewables-based
(16%). Consequently, the shares of fossil fuels and systems also offer the most cost-effective and
renewables in global installed electricity capacity now fastest solutions for delivering universal clean
stand at almost 1:1. In terms of global annual electricity energy access by 2030. The combination of grid,
generation, renewables increased by 4,470 terawatt- mini-grid, and off-grid renewable solutions can be
hours (TWh) (81%), while fossil fuels increased by leveraged to deliver fast and lasting access, especially
2,150 TWh (13%). Meanwhile, the sales of EVs have in difficult-to-reach rural locations where eight out
increased by 3,300%, from 0.5 million (1% of all car of ten people without access to electricity live. Stand-
sales) in 2015 to over 17 million (>20% of all car sales) alone, off-grid solar solutions served 490 million
in 2024. Experts believe that solar, wind, and EVs people in total by 2022. Multiple studies show
have irreversibly crossed a positive tipping point that the systematic adoption of renewables and
and entered a virtuous cycle of cost decline and improvements in energy efficiency, combined
widespread adoption. with progressive policies, can continue to lead to
net gains in jobs, GDP, and other social welfare
As a result, a new clean energy economy is benefits as the transition progresses in the short,
emerging, contributing to growth in gross domestic medium, and long term. The implementation
product (GDP) and creating jobs while helping to of small-scale renewable energy microgrids in
decouple growth from emissions. Global annual developing countries has been shown to significantly
clean energy investments exceeded USD 2 trillion contribute to sustainable development by improving
for the first time in 2024, having surpassed those for livelihoods, reducing poverty and pollution exposure,
fossil fuels for the first time in 2016. Clean energy and enhancing food security, health, and education.
jobs reached a total of 34.8 million in 2023, of which
16.2 million are in renewables. In 2023, the sector Despite this, renewable energy is not replacing
added around USD 320 billion to the global economy, fossil fuels in energy systems at the pace and
accounting for 10% of GDP growth globally and nearly scale needed. To enable all countries to seize the
one-third in the European Union (EU). In 2024, the benefits of the emerging clean energy economy,
clean energy sector accounted for 10% of the economy structural barriers and major challenges will need
of the People’s Republic of China (hereafter referred to be overcome. These include: developing enabling
to as China) and drove a quarter of the country’s GDP policy and regulatory frameworks that provide a
growth. Since 1990, economic growth has decoupled level playing field for clean energy; prioritizing
from greenhouse gas (GHG) emissions for more than modernization and expansion of critical enabling
five years at least in more than 40 countries. energy infrastructure such as grids and storage;
enhancing the resilience and diversity of clean
Accelerating the transition away from fossil fuels energy supply chains; increasing the availability,
to renewables brings with it myriad positive social accessibility, and affordability of energy-transition
and economic benefits. In particular, renewable finance for developing economies; and addressing
energy can boost energy access, affordability, political resistance from vested fossil fuel interests.
and security. Around 74% of the global population
lives in countries that are net importers of fossil The deployment of and investment in renewable
fuels. Dependence on fossil fuel imports exposes energy technologies have so far been highly
countries to volatile prices, supply disruptions, concentrated in advanced economies and China.
and geopolitical turmoil. Following the outbreak Of the 4,448 GW of total renewable capacity installed
of war in Ukraine in early 2022, the price of natural globally by the end of 2024, 41% was in China, 39%
gas — and consequently electricity prices in some in OECD countries, and almost half of the remaining
markets — reached record highs, while oil prices hit 20% in Brazil and India. Africa made up a mere
their highest level since 2008. This directly increased 1.5%, despite accounting for 85% of the global
 Executive summary 03

population without electricity access, and despite capital — for both debt and equity financing. For
possessing renewable resource potential ten times example, the cost of capital for utility-scale solar PV
larger than the continent’s projected electricity projects in EMDEs is well over twice as high as it is in
demand in 2040 under a 1.5°C-aligned scenario. advanced economies. Trade policies and investment
Since the Paris Agreement came into force in 2016, agreements must also be aligned with, and actively
less than one in every five dollars invested in clean support, the transition to sustainable and inclusive
energy has gone to emerging markets and developing development — rather than hinder progress.
economies (EMDEs) outside China. The geographic
concentration of raw materials processing We have an unprecedented moment of
and manufacturing capacity for clean energy opportunity to invest in the policies, frameworks,
technologies also creates risks for the security and and infrastructure needed to capitalize on
resilience of supply chains. the falling costs, manufacturing capacity, and
abundant resource endowment of renewable
In addition to this geographic concentration, the energy to unlock the transition globally —
deployment of renewables-based technologies has particularly in developing countries where
also thus far been mainly confined to the power renewable resources are vast and energy access
generation and light-duty transport sectors. This, needs are greatest. Governments, international
combined with limited progress on improving institutions and partners, and development finance
energy efficiency and on the electrification of all institutions (DFIs), as well as the private sector, all
end-use sectors, as well as continued fossil fuel have vital roles to play. This report lays out six key
expansions, means that the share of fossil fuels areas of action for accelerating the transition:
in global total energy supply only decreased from
83% to 80% between 2015 and 2024. 1. Provide policy coherence, clarity, and
certainty — governments should align policies,
On the domestic side, governments must also do incentives, and resources to accelerate the just
more to create the enabling conditions to attract energy transition.
investments and drive implementation. Discordant
policies can impede and undermine progress. 2. Invest in enabling infrastructure for the 21st
Government subsidies for fossil fuels also remain high, century energy system.
while effective carbon pricing remains insufficient. 3. Meet new electricity demand with renewables,
Long-term, integrated national energy strategies especially for rapidly growing sectors like Big
are a vital planning tool for guiding the transition to Tech — in particular for Artificial Intelligence
a net-zero and increasingly renewables-dominant (AI) and data centres.
energy system, but few countries have developed
such roadmaps. Lagging investments in expanding 4. Place people and equity at the heart of the just
and modernizing electricity grids also means that energy transition to drive inclusive economic
grids are becoming a bottleneck for the energy development.
transition: at least 3,000 GW of renewable power 5. Supercharge the transition by increasing
projects are waiting in grid connection queues. cooperation on trade and investment.
6. Dismantle structural barriers to mobilize
Most crucially, the biggest challenge lies in
energy-transition finance for developing
scaling up clean energy-transition financing and
countries.
investments for EMDEs beyond China. To keep the
1.5°C limit of the Paris Agreement within reach and The race to develop and deploy clean energy
deliver on the Sustainable Development Goals (SDGs), technologies to replace fossil fuels is the defining
experts estimate that annual clean energy spending economic imperative and opportunity of this
in these countries will have to increase by around decade — one that will power the new, green
five to seven times from 2022 levels to USD 1.4–1.9 industrial revolution of the 21st century. With
trillion a year by 2030, and to over USD 2 trillion a smart and pragmatic policies — and greater
year by 2035. This hinges upon tackling persistent international cooperation — a clean, secure,
and systemic barriers in the international financial affordable, and equitable global energy system is
architecture, demystifying perceived risks, and within our reach. We should seize the solutions at
addressing real risks to bring down the cost of hand to grasp it.
 Introduction 04

Section 1 — Introduction

The year 2015 marked a turning point in global set a net-zero target in 2015. As of June 2025, 141
climate governance, with the adoption of the countries, 284 cities, and 1,191 companies had set
landmark Paris Agreement at COP21.2 It has an net-zero targets, covering at least 76% of global GHG
overarching goal of holding the increase in global emissions and 78% of global GDP.8,iii Between 2015
average temperature relative to pre-industrial levels and 2023, the coverage of global GHG emissions with
to well below 2°C and pursuing efforts towards carbon pricing approximately doubled from 12% to
1.5°C. Subsequent COPs have resolved to limit the 25%.9 Major global milestones such as the issuance
temperature increase to 1.5°C, recognizing that this of the first Intergovernmental Panel on Climate
would significantly reduce the risks and impacts Change (IPCC) report in 1990 and the adoption of the
of climate change compared to 2°C. At COP28, Paris Agreement in 2015 have boosted the impact of
Parties delivered a comprehensive vision for domestic policies on green patent filings.10
a 1.5°C-aligned energy system transformation,
establishing global targets that include tripling Over the past few decades, the climate imperative
renewable energy capacity by 2030, doubling the has been instrumental in helping to drive
annual rate of energy efficiency improvements by innovation and investments in renewable energy
2030, and transitioning away from fossil fuels in technologies, spurring them to reach economies
line with global net-zero emissions by 2050, with of scale.iv Experts believe that solar, wind, and
accelerated near-term action.3 EVs have irreversibly crossed a positive tipping
point and entered a virtuous cycle of cost decline
The collective ratcheting up of global climate and widespread adoption.11,12 The cost of utility-
ambition and action over the last ten years scale solar PV has fallen by 80–90% each decade
means that projected global warming has been since 1960, whereas the costs of fossil fuels are
progressively declining.ii According to the UNEP highly volatile and show no long-term decrease.
Emissions Gap Report series, between the 2015 and New solar PV has been undercutting new coal- and
2024 assessments, the maximum level of global gas-fired power plants in most of the world for six
warming within this century under a current-policies years, and the gap in their average lifetime electricity
scenario fell from just below 4°C to 3.1°C. Meanwhile, generation costs continues to widen in favour of
under a scenario in which Parties’ conditional solar. Meanwhile, global manufacturing capacity
nationally determined contributions (NDCs) are fully of renewable energy technologies is outstripping
implemented, projected global warming fell from demand: announced solar PV and battery projects
3–3.5°C to 2.6°C, and lower still to 1.9°C if net-zero can already cover the global deployment needs of
pledges are also fully achieved.4,5 the tripling renewable capacity by 2030 goal.13

The strengthening of international and national The IEA projects several significant renewable
climate policies has created positive multiplier energy milestones to be reached in the power
and spillover effects, catalyzing commitments sector in the next five years. In 2025, renewables-
and action by sub-national and non-state actors, based electricity generation is set to overtake
driving low-carbon technological innovation coal-fired generation for the first time. Non-fossil
and adoption, and stimulating economies to fuel sources are expected to meet all global demand
decarbonize.6,7 Bhutan was the first country to growth out to 2027, with renewables set to meet

ii  he term global warming represents global mean surface temperature, averaged over decades, relative to pre-industrial levels. All global warming
T
projections quoted are for at least a 66% likelihood and come with large uncertainty ranges. For example, for conditional NDCs submitted as of
September 2024, which are contingent upon climate finance support, the central estimate and uncertainty range are 2.6°C (1.9–3.6°C). See full
details in the 2015 and 2024 UNEP Emissions Gap Reports.
iii T
 his estimate only considers country-level targets — including states in the United States of America, for example, would raise GDP coverage to
at least 84% and increase the emissions coverage.
iv The term economies of scale refers to the phenomenon where the average cost per unit of output decreases with an increase in the scale or
magnitude of production.
 Introduction 05

around 95%. Solar and wind power generation are Ten years on from the Paris Agreement, 2025 must
both set to surpass nuclear in 2026. In 2029, solar mark another pivotal turning point: the year in
PV electricity generation is expected to surpass which we seize the opportunities and solutions at
hydropower to become the largest single renewable hand to kickstart a decade of accelerated clean
power source, and wind will surpass hydropower in energy implementation and finally peak and
2030.14,15 reduce global emissions — especially from the
energy sector.
While economic pragmatism and energy security
concerns will now drive the transition away from This special report aims to synthesize the latest
fossil fuels to renewables, progressive policies evidence for the economic imperative and benefits
— as well as greater international cooperation — of accelerating the transition away from fossil
will be vital to dismantle barriers and accelerate fuels to clean energy with a particular focus on
progress, and to ensure a just, orderly, and renewables, electrification, and energy efficiency.
equitable transition in line with delivering on the While these three solutions will play central roles in
Paris Agreement and SDGs. the clean energy system of the 21st century, they do
not represent the full picture, and this report does
At the same time, the economic case for not aim to comprehensively capture all dimensions of
accelerating climate action to minimize damages the energy system transformation needed to deliver
has never been clearer. Extreme weather events on the Paris Agreement’s goals.v Section 2 provides
are intensifying in frequency and ferocity, an assessment of the current state of play of the
devastating lives, livelihoods, and economies, transition. Section 3 summarizes the socioeconomic
disrupting supply chains, increasing the debt benefits of accelerating the transition, while Section
burden of developing countries, and driving up 4 highlights the key barriers and challenges of the
the cost of living across the world.16–18 In 2024, current transition. Section 5 highlights priority
economic losses due to weather-related extreme action areas for accelerating a fast, fair, and funded
events were estimated to be USD 320 billion, of transition to deliver a safe, resilient, and prosperous
which 56% were uninsured.19 Study after study has future for all.
shown that the cost of inaction is far greater than
the cost of action.20–22 For example, recent analyses
by the Network for Greening the Financial System
estimate that climate damages could result in regional
economic losses amounting to 6% of GDP in Asia and
up to 12.5% in Africa over the next five years; by 2050,
losses could reach 15% of GDP globally.23

Without further action, climate impacts will

intensify and continue to reshape economic
and financial systems, jeopardizing long-
term development and security, especially in
vulnerable countries. The latest assessments from
the World Meteorological Organization (WMO)
found that 2024 was the warmest year in the 175-
year observation record, and likely the first in which
the 12-month average exceeded 1.5°C above pre-
industrial levels. Between 2025 and 2029, there is
now an 86% chance that at least one year will be
warmer than 1.5°C, and a 70% chance that the five-
year average will also exceed 1.5°C.24,25 Despite these
long-standing and increasingly stark warnings, global
carbon dioxide (CO2) emissions from fossil fuels
continue to hit record high levels.26

v  or a comprehensive overview of such discussions, see, for example, the IEA’s Net Zero by 2050 Roadmap (2023) and IRENA’s World Energy
F
Transitions Outlook: 1.5°C Pathway (2024).27,28
 The energy transition today: Progress since Paris 06

Section 2 — The energy transition today:

Progress since Paris

The year 2024 saw multiple records broken for the investments in the clean energy transition exceeded
clean energy transition and for renewable energy USD 2 trillion for the first time.31 (See Annex for the
in particular. Global installed capacity of renewable definitions of clean energy and renewable energy
power increased by 585 GW, marking a record annual used throughout this report, and for definitions of
growth rate of 15.1% and accounting for 92.5% of electricity capacity and generation.)
power capacity additions from all sources.29 The
share of clean energy sources in global electricity This section explores six indicators that illustrate
generation surpassed 40% for the first time, with how the clean energy transition is well underway
renewables accounting for 32%.30 Meanwhile, global and accelerating. Table 1 summarizes how some of

Table 1. Summary of progress in the global clean energy transition between 2015 and 2024.
(References for data sources are denoted in the first column. All data shown represent annual values.)

2015 2024 Percent change in

(*2023 latest year the absolute value
available) since 2015

Total energy supply, Fossil fuels 465 EJ (83%) 519 EJ (80%) +12%
EJ (and % share
of total from all Renewables 70 EJ (12%) 97 EJ (15%) +39%
sources)32,33

Electricity Fossil fuels 16,122 TWh (66%) 18,267 TWh (59%) +13%
generation, TWh (and
% share of total from Renewables 5,519 TWh (23%) 9,992 TWh (32%) +81%
all sources)32,33

Installed electricity Fossil fuels 3,908 GW (62%) 4,548 GW (47%) +16%

capacity, GW (and %
share of total from all Renewables 1,849 GW (29%) 4,448 GW (46%) +141%
sources)29,33
Battery storage 2 GW (0.03%) *89 GW (1%) +4,350%

Electricity capacity Fossil fuels 100 GW (38%) 43 GW (7%) -57%

additions, GW (and
% share of total from Renewables 153 GW (59%) 585 GW (93%) +282%
all sources)29

Sales of electric vehicles (and % of all car 0.5 million (1%) >17 million (over +3,300%
sales)34 20%)
 The energy transition today: Progress since Paris 07

Global average Coal 9.5 *7.2 -24%

cost of electricity
generation (LCOE), Gas 5.3 *8.3 +57%
USD cents/kWh1,35
Utility-scale solar PV 13.5 4.3 -68%

Concentrated solar 25.1 9.2 -63%

power (CSP)

Onshore wind 7.5 3.4 -55%

Offshore wind 15.5 7.9 -49%

Investments, USD31 Fossil fuels 1,493 billion 1,198 billion -20%

Clean energy:
Total 1,209 billion 2,033 billion +68%
Renewable power 374 billion 760 billion +103%
Grids and storage 332 billion 445 billion +34%
Energy efficiency 450 billion 729 billion +62%
and end-use

Jobs36,37 Fossil fuels No data *32.6 million

Clean energy *34.8 million

Renewable energy 9.4 million *16.2 million +72%

GDP growth from clean energy sector, USD No data *320 billion (10%)
(and % of total GDP growth)38

the key underlying metrics have evolved since 2015, onshore wind was 23% higher than fossil fuels; by
the year the Paris Agreement was adopted. 2024, it was 53% lower, averaging USD 3.4 cents/kWh.
Globally in 2024, 91% of new renewable projects
i) Cost declines of renewable power offered cheaper electricity than the lowest-cost,
new-build fossil fuel alternative. The significant
Due to steadily improving technologies, cost reduction also extends to enabling technologies
competitive supply chains, and economies of such as battery storage. Between 2010 and 2024, the
scale, renewable energy technologies have seen costs of utility-scale battery energy storage systems
spectacular cost declines since 2010, as shown in for grid applications fell by 93%, from USD 2,571/
Figure ES1. As detailed in IRENA’s Renewable Power kWh in 2010 to USD 192/kWh in 2024. The abundance
Generation Costs in 2024 report, the global weighted of renewable energy technology manufacturing
average levelized cost of electricity (LCOE) generated capacity in China was a key driver behind their cost
from new utility-scale solar PV was 414% higher declines in recent years.39
than that from the least-cost new fossil fuel-fired
option in 2010.1,vi By 2024, solar PV was 41% cheaper, For comparison, the 2023 global average costs of
averaging USD 4.3 cents/kWh. In 2010, the cost of electricity generation from new coal- and gas-fired

vi See Annex for definition of LCOE.

 The energy transition today: Progress since Paris 08

power plants were around USD 7.2 and 8.3 cents/kWh while concentrated solar power (CSP), hydropower,
respectively, and around USD 12 cents/kWh when and offshore wind projects can take up to five years
coupled with carbon capture and storage (CCS), while or more on average.
that from new nuclear power plants was USD 23.1
cents/kWh.35 In 2023, an estimated 96% of newly With their cost competitiveness and relatively
installed, utility-scale solar PV and onshore wind short project lead times, solar PV and onshore
capacity had lower power generation costs than wind are experiencing dramatic growth that is
new coal and gas plants, while around 75% of new continuously exceeding even the most optimistic
wind and solar PV plants offered cheaper power forecasts.47 In 2024, global installed capacity of
than existing fossil fuel facilities globally.40 renewable power saw a record annual growth
rate of 15.1% (585 GW), with solar making up over
At the national level, solar and wind power three-quarters of this expansion (452 GW), followed
became cost-competitive with fossil fuels without by wind (113 GW).29 This is the 23rd year in a row
financial support in many countries between that renewable capacity additions set a new record.
2010 and 2022.41 By 2022, most major markets Moreover, renewables also accounted for the largest
had achieved cost parity, with most of the newly share of the growths in global power generation
commissioned projects delivering electricity at (74%) and total energy supply (38%).32
lower costs than fossil fuel-based alternatives
— this trend is shown in Figure 1 for 20 countries. As the middle panel of Figure 2 shows, each year
Although comprehensive LCOE estimates for since 2015, over 50% of global power capacity
renewables coupled to battery energy storage additions have come from renewables, and over
systems remain limited, available data indicate 75% since 2020. In particular, solar and wind
that such systems are becoming increasingly cost- have become the fastest sources of electricity to
competitive with coal- and gas-fired power plants scale up in history, with rapid growth in installed
in key markets including Australia, China, the EU, capacity on all continents.48 In 2024, absolute
India, and the United States of America (USA), and capacity additions from renewables exceeded those
their costs are projected to continue to fall rapidly in from fossil fuels in all regions shown in Figure 3
the coming years.1,42 For example, IRENA found that except for the Middle East. Nevertheless, as further
in 2024, 17 operational hybrid solar-battery projects discussed in Section 4, the deployment of solar
in the USA achieved average LCOE of USD 7.9 cents/ and wind capacity remains highly concentrated in
kWh, which is comparable to the midpoint of the developed countries and in China, India, and Brazil.
LCOE range for combined-cycle gas turbine (CCGT) In 2024, the top 10 countries with the largest absolute
power plants (USD 7.6 cents/kWh) and below that solar capacity additions were China (278 GW), the
for coal-fired power plants (USD 11.8 cents/kWh).1,43 USA (38.3 GW), India (24.5 GW), Brazil (15.2 GW),
In Australia, eight hybrid projects combining solar, Germany (15.1 GW), Türkiye (8.6 GW), Spain (6.7 GW),
wind, and battery storage reported average LCOE of Italy (6.7 GW), Australia (5.2 GW), and France (4.1
USD 5.1 cents/kWh, outperforming new-build coal GW).29
(USD 8.4 cents/kWh) and CCGT (USD 10.3 cents/kWh)
power plants.44 Still, new solar markets are emerging rapidly in
other EMDEs. For example, in the first seven months
ii) Pace and scale of renewable energy of 2024, Pakistan imported 12.5 GW of solar panels,
while Saudi Arabia imported 9.7 GW. Oman, the
technologies deployment
Philippines, Thailand, and the United Arab Emirates
When new power capacity is under consideration (UAE) have also increased imports recently.49
today, solar PV and onshore wind not only Meanwhile, although Africa remains the continent
offer the cheapest option, but also the fastest. with the lowest share of solar and wind in the
On average, project lead times (planning, electricity mix globally, new solar installations are
development, and construction) for utility-scale projected to increase by more than 40% in 2025 from
solar PV and onshore wind take one to three 2024, when around 2 GW were added.50 Between
years, whereas coal- and gas-fired power plants 2011–2013 and 2021–2023, the annual average
can take up to five years or more, and 10–15 years number of internationally-financed renewable
for nuclear power plants.45,46 For other renewables, projects increased from 42 to 127 in Africa, and from
small-scale solar PV systems take less than a year, 89 to 248 in Latin America and the Caribbean.51
 The energy transition today: Progress since Paris 09

Figure 1. Levelized cost of electricity (LCOE) from weighted-average fossil fuels versus onshore wind and
utility-scale solar PV (USD/kWh) in 20 countries, 2010–2024.
The dashed vertical lines mark the year in which the LCOE of onshore wind (blue line) or solar PV (green line) first
became lower than the weighted-average LCOE from fossil fuels.
2010−2014 LCOE trends in 20 countries, USD/kWh
Argentina Australia Brazil Canada
0.6 0.6 0.6 0.6
0.5 0.5 0.5 0.5
0.4 0.4 0.4 0.4
0.3 0.3 0.3 0.3
0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.0 0.0
2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022

China France Germany India

0.6 0.6 0.6 0.6
0.5 0.5 0.5 0.5
0.4 0.4 0.4 0.4
0.3 0.3 0.3 0.3
0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.0 0.0
2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022

Indonesia Italy Japan Malaysia

0.6 0.6 0.6 0.6
0.5 0.5 0.5 0.5
0.4 0.4 0.4 0.4
0.3 0.3 0.3 0.3
0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.0 0.0
2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022

Mexico Philippines Republic of Korea South Africa

0.6 0.6 0.6 0.6
0.5 0.5 0.5 0.5
0.4 0.4 0.4 0.4
0.3 0.3 0.3 0.3
0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.0 0.0
2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022

Türkiye UK USA Viet Nam

0.6 0.6 0.6 0.6
0.5 0.5 0.5 0.5
0.4 0.4 0.4 0.4
0.3 0.3 0.3 0.3
0.2 0.2 0.2 0.2
0.1 0.1 0.1 0.1
0.0 0.0 0.0 0.0
2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022 2010 2014 2018 2022
Fossil fuels Onshore wind Solar PV

Data source: IRENA.1

 The energy transition today: Progress since Paris 10

As a result, the share of renewables in global annual average rate of improvement between 2022
electricity generation has increased from around and 2024 fell to 1% a year.55 Meanwhile, the share
23% in 2015 to 32% in 2024 (Figure 2). For non- of electricity in total final energy consumption
biomass variable renewables, the share increased only increased from 18% in 2015 to 20% in
from 21% to 30%. By 2022, 61 countries generated 2023.56 Much greater effort is needed to speed
more than 50% of electricity from non-biomass up the electrification of and energy efficiency
renewable sources, 31 countries more than 75%, and improvements in the transport, industry, and
15 countries more than 90% (Figure 4). In particular, building end-use sectors.
solar power is surging worldwide, with 99 countries
doubling the amount of electricity generation from In terms of total energy supply, fossil fuels
solar energy between 2020 and 2024.30 continue to dominate the share, decreasing
from 83% in 2015 to 80% in 2024 globally — with
For variable renewable sources like solar and renewables accounting for 15% in 2024.32,viii In
wind, energy storage and smart grid technologies 2022, in around half of all countries fossil fuels
will be essential for integrating large quantities exceeded 75% of the total energy mix (Figure 4). This
of renewable power securely and reliably. The is primarily for six reasons. First, given the scale and
use of digital technologies can also help to improve complexities of the energy system, its transformation
energy and material efficiency in end-use sectors.52 will inevitably take time due to the slow capital-stock
Grid-related investment in digital technologies turnover of energy infrastructure. Second, actual
grew by over 50% between 2015 and 2022 to USD 63 progress in terms of adding or replacing energy
billion.53 The global battery market is also advancing equipment with new renewables-based technologies
rapidly as demand rises sharply and prices continue has thus far been confined to a few sectors (i.e. power
to decline. Strong growth occurred in both the power generation and light-duty transport) and regions
sector — for utility-scale battery projects as well as (i.e. the advanced economies and China). Third, as
mini-grids and solar home systems — and in the discussed above, there has been far too little progress
transport sector as an essential component of EVs. In on energy efficiency and electrification. Fourth,
2023, 42 GW of battery storage capacity was added global energy demand has been growing, especially
to electricity systems worldwide.42 in EMDEs, and renewables have thus far largely
added to expanding overall energy production rather
Meanwhile, sales of EVs have been rapidly than replacing fossil fuels.58,59 Fifth, new fossil fuel
growing globally, increasing by over 33 times, production and consumption projects continue to
from 0.5 million (1% of all car sales) in 2015 to be developed and added to the global energy mix.
over 17 million (>20% of all car sales) in 2024.34 EVs Between 2015 and 2024, total energy supply from
now account for almost half of all car sales in China, fossil fuels grew by 12%, and a cumulative total of
20% in Europe, and over 10% in the USA. Emerging 736 GW of fossil fuel-based electricity capacity was
markets in Asia and Latin America are becoming added.33,54 Finally, certain methodological accounting
new centres of growth, with EV sales jumping by conventions make the share of renewables in total
over 60% in 2024 to almost 600,000 — about the size primary energy supply a poor indicator of their role
of the European market in 2019. Electric car sales in in providing useful energy services. Section 4 further
2025 are expected to exceed 20 million worldwide to explores some of the major barriers to accelerating
represent over 25% of all cars sold. the transition away from fossil fuels.

On the other hand, global progress on energy iii) Investments in the clean energy transition
efficiency has been limited to date. In 2022, the
global economy produced 2% more GDP for every In 2016, global clean energy investments surpassed
unit of energy consumed compared with 2021. those for fossil fuels for the first time by a narrow
This formed the baseline for the goal of doubling margin of USD 34 billion; by 2024, that difference
energy efficiency agreed at COP28.vii However, the stood at USD 835 billion.31 Total clean energy

vii  he doubling energy efficiency goal means increasing the rate of improvement to around 4% on average every year between now and 2030.
T
viii In the IEA’s world energy balances and statistics datasets, total energy supply (TES) for a given primary fuel (e.g. fossil fuels or renewables)
represents the sum of electricity generation and heat, other transformation activities, and total final consumption (TFC).57 In 2022, global
TFC was distributed as follows: industry (30%), transport (28%), residential and commercial buildings (28%), non-energy uses of fuels (10%),
agriculture and forestry (2%), and others (2%).56
 The energy transition today: Progress since Paris 11

Figure 2. Global annual electricity capacity additions (top), share of different sources in installed capacity
additions (middle), and share of different sources in electricity generation (bottom), 2010–2024.

500
Electricity capacity additions (GW)

400 Oil
Gas
Coal
300 Bioenergy
Other renewables
Wind
200
Solar
Hydro

100

0
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024
100
Share in capacity additions (%)

Oil

75 Gas
Coal
Nuclear
50
Bioenergy
Other renewables
25 Wind
Solar

0 Hydro
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

100

Oil
Share in generation (%)

75 Gas
Coal
Nuclear
50
Bioenergy
Other renewables
25 Wind
Solar
Hydro
0
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Data source: Ember.54

 The energy transition today: Progress since Paris 12

Figure 3. Annual electricity capacity additions of renewables versus fossil fuels

by region and in China (GW), 2015–2024.

China Rest of Asia Africa

50
20
40
300
15
30

200 20 10

10
100 5
0

0 −10 0
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Europe Latin America and Caribbean Middle East
90
20

20
60 15

10
30
10

0
0
0
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2017
2018
2019
2020
2021
2022
2023
North America Oceania 2024
9

Oil
6 Gas
25
Coal

Bioenergy
3
Other renewables
0 Wind

Solar
0
Hydro

−25
−3
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

Data source: Ember.54

 The energy transition today: Progress since Paris 13

investments exceeded USD 2 trillion for the first sector, renewable energy jobs were estimated
time in 2024, with USD 760 billion going towards at 16.2 million — with 7.4 million in China, 1.8
renewable power, USD 729 billion for energy million in the EU, 1.6 million in Brazil, just over
efficiency and end-use, and USD 445 billion for 1 million each in India and the USA, 324,000 in
grids and storage — albeit at high concentration in Africa, and 91,000 in Oceania.37 Both centralized
the advanced economies and China, as discussed and decentralized renewable energy systems are
further in Section 4. The IEA projects that clean spurring job creation. For example, in 2021 the
energy investments will reach around USD 2.2 trillion number of people directly employed in decentralized
in 2025, while fossil fuel investments will total USD renewable energy — used by households and
1.1 trillion. This means that today, for every dollar commercial and industrial enterprises for both
going to fossil fuels, two dollars are invested in electricity and clean cooking applications — reached
the clean energy transition.ix more than 80,000 in India (mostly in solar PV), 50,000
each in Kenya and Nigeria, almost 30,000 in Uganda,
Moreover, the diffusion of clean energy technologies and almost 14,000 in Ethiopia.64
through trade and foreign direct investment
(FDI) has surged since the adoption of the Paris v) Decoupling economic growth from emissions
Agreement. Between 2014 and 2022, global clean
energy FDI — primarily in renewable energy, EVs, There are signs of a weakening link between CO2
and green hydrogen — tripled as a share of global emissions and GDP growth on a global scale.65,66
GDP, accounting for 40% of all new announced Between 2023 and 2024, the growth in energy-related
greenfield FDI in 2022.10,60 Since 2015, the total CO2 emissions slowed to 0.8% while the global
number of international investment projects in economy expanded by more than 3%. Clean energy
SDG-related sectors has grown by 25%, primarily technologies deployed since 2019 are helping to avoid
driven by renewable energy projects, underscoring around 2.6 billion tonnes of CO2 emissions annually
their critical importance in the broader push (of which 87% are due to solar PV and wind power),
for sustainable development.51 Nevertheless, the which are roughly equivalent to annual fossil-CO2
momentum is facing strong headwinds. Between emissions in the EU.32,67
2023 and 2024, greenfield FDI in renewable energy
declined by 24% to a total of around USD 267 billion.61 Since the 1990s, more than 40 countries, including
(See Annex for definitions of FDI and greenfield FDI.) 15 non-OECD countries, have decoupled economic
growth from GHG emissions for more than five
years at least.68 In aggregate, advanced economies
iv) Contributions of the clean energy sector to have seen CO2 emissions peaking and declining from
jobs and economic growth 2007 onwards, while GDP growth has continued,
The dramatic rise in clean energy deployment even when consumption of goods manufactured
means that a new clean energy economy is overseas is accounted for.69 Such diverging trends of
emerging. The sector is now powering economic economic activity and emissions are also starting to
development and jobs in many countries around become apparent in the African, Eurasian, and Latin
the world.62 In 2024, the clean energy sector is American regions, as well as in China and India.66
estimated to have accounted for more than 10% of
China’s economy for the first time, driving 26% of the vi) Innovative mechanisms to support just
country’s GDP growth.63 The year before, the sector energy transitions in developing countries
added around USD 320 billion to the global economy,
accounting for 10% of GDP growth globally; almost Recent years have seen a proliferation of
5% in India, 6% in the USA, 20% in China, and nearly international alliances focused on various aspects
one-third in the EU.38 Clean energy jobs (direct and of advancing a global just energy transition, as
indirect) surpassed those from fossil fuels for the well as the emergence of innovative support
first time in 2021. In 2023, clean energy jobs grew mechanisms for developing countries. In
by 1.5 million, bringing the total to 34.8 million, particular, so-called “country platforms” — voluntary,
while jobs in the fossil fuel sector grew by 940,000 government-led, and multi-stakeholder partnerships
to a total of 32.6 million.36 Within the clean energy used to attract and coordinate international public
finance in support of common goals — have the

ix These values are expressed in terms of real 2024 USD.

 The energy transition today: Progress since Paris 14

Figure 4. Percent share of electricity generation from non-biomass renewable sources (top) and percent
share of fossil fuels in total energy supply (bottom), 2022 (the latest year with complete country-level data).

! ! !

!
!

!
Null 0 10 20 30 40 50 60 70 80 90 100 (%)

UNITED NATIONS Geospatial

The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance by the United Nations. Dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final
status of Jammu and Kashmir has not yet been agreed upon by the Parties. Final boundary between the Republic of Sudan and the Republic of South Sudan has not yet been determined. A dispute exists between the Governments of Argentina and the United Kingdom of Map No. 4700
Great Britain and Northern Ireland concerning sovereignty over the Falkland Islands (Malvinas). June 2025

! ! !
!

!
!

Null 0 10 20 30 40 50 60 70 80 90 100 (%)

UNITED NATIONS Geospatial

The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance by the United Nations. Dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final
status of Jammu and Kashmir has not yet been agreed upon by the Parties. Final boundary between the Republic of Sudan and the Republic of South Sudan has not yet been determined. A dispute exists between the Governments of Argentina and the United Kingdom of Map No. 4701
Great Britain and Northern Ireland concerning sovereignty over the Falkland Islands (Malvinas). June 2025

Sources of statistical data: Ember;54 IEA.56

These maps are intended only to show statistical data where available and do not imply official endorsement or acceptance by the data providers.
 The energy transition today: Progress since Paris 15

potential to serve as a powerful mechanism to

accelerate country-driven, context-specific action on
climate and the energy transition that aligns with
national priorities.70–72

The Just Energy Transition Partnerships (JETPs)

that were launched for South Africa, Indonesia,
Viet Nam, and Senegal between 2021 and 2023
are one example of these country platforms
— with the specific goal of accelerating the
energy transition in partnership with a selected
number of developing countries. As of June 2025,
the International Partners Group (IPG) of donors
included Canada, Denmark, France, Germany,
Italy, Japan, Norway, the EU, and the United
Kingdom of Great Britain and Northern Ireland
(UK), with additional private sector and public
finance institution commitments coordinated
through the Glasgow Financial Alliance for
Net Zero (GFANZ). While the scope of the JETPs
varies between countries, most have focused
on reducing emissions from the power sector
by accelerating the retirement of coal power,
ramping up renewable energy deployment, and
upgrading grid infrastructure to enable high
renewables penetration. Notwithstanding ongoing
challenges and complexities given the scale
of transformation required, JETPs have been
instrumental in driving country-level just energy
transitions and investment planning, the setting of
ambitious fossil fuel phase-down and renewable
phase-in targets, and bringing together relevant
stakeholders across governments and society.73,74

South-South cooperation on the clean energy

transition has also been scaling up in recent years,
particularly by China through its Belt and Road
Initiative (BRI), which accounted for 10–15% of
international project finance deals in Sub-Saharan
Africa in recent years.75 Furthermore, intra-regional
support mechanisms also exist, such as the EU’s Just
Transition Fund to support member states in their
economic diversification and workforce reskilling
towards net zero.
 Opportunities and benefits of accelerating the energy transition 16

Section 3 — Opportunities and benefits of

accelerating the energy transition

As the previous section showed, the clean energy GDP on fossil fuel imports.76,77 For oil and gas,
transition has made significant strides in multiple as of 2022, 93 countries (out of 147 countries with
areas over the past decade. In this section, we reported data) are net importers, with 69 countries
explore six key dimensions of the socioeconomic being fully reliant on imports to meet their domestic
benefits that can be gained by accelerating this consumption (Figure 5).
transition beyond its essential role in driving
rapid, deep, and sustained GHG emissions cuts to Dependence on fossil fuel imports creates
minimize climate damages and keep 1.5°C within vulnerability to volatile prices, supply disruptions,
reach. and geopolitical turmoil. According to the IEA’s
assessment, energy markets began to tighten in
i) Energy security and sovereignty 2021 primarily due to the rapid economic rebound
following the COVID-19 pandemic, but the situation
Around 74% of the global population currently escalated dramatically into “a full-blown global
lives in countries that are net importers of energy crisis” following the Russian Federation's
coal, oil, and gas, and one in four people live in invasion of Ukraine.78 The price of natural gas — and
countries that spend at least 5% of their annual

Figure 5. Oil and gas net import dependence (total imports minus exports as percent of total energy supply), 2022.
Countries with values less than 0% are net exporters and shaded in blue. Grey denotes no data.

! ! !
!

!
!

Null <0 0 10 20 30 40 50 60 70 80 90 100 (%)

UNITED NATIONS Geospatial

The boundaries and names shown and the designations used on this map do not imply official endorsement or acceptance by the United Nations. Dotted line represents approximately the Line of Control in Jammu and Kashmir agreed upon by India and Pakistan. The final
status of Jammu and Kashmir has not yet been agreed upon by the Parties. Final boundary between the Republic of Sudan and the Republic of South Sudan has not yet been determined. A dispute exists between the Governments of Argentina and the United Kingdom of Map No. 4702
Great Britain and Northern Ireland concerning sovereignty over the Falkland Islands (Malvinas). June 2025

Statistical data source: IEA.56

This map is intended only to show statistical data where available and does not imply official endorsement or acceptance by the data provider.
 Opportunities and benefits of accelerating the energy transition 17

consequently electricity prices in some markets spending GBP 800 (USD 990) more on energy
— reached record highs, while oil prices hit their bills, and the government GBP 50–60 (USD 62–74)
highest level since 2008. This directly increased billion more on gas imports.82 Were it not for
the costs of heating, cooling, lighting, and mobility, renewables providing around 40% of the UK’s
and indirectly pushed up the costs of other goods electricity, gas power generation could have been
and services throughout global supply chains, twice its actual level, dramatically increasing prices
exacerbating the cost-of-living crisis in 2022. and household bills even further. Wholesale spot
prices for natural gas also increased to record
The IEA estimates that in 2022, consumers highs across European continental markets,
worldwide spent on average USD 1,200 per leading to significant increases in wholesale
person on energy bills, even after considering the electricity prices (Figure 6). According to one study,
subsidies and emergency support mobilized by in 2021–2022 the rise in natural gas prices accounted
governments. This is 20% more than the average for around 90% of the increase in wholesale
over the previous five years.80 Countries relying electricity prices, while higher carbon prices in the
on high gas imports were hit particularly hard. For EU Emissions Trading System accounted for the
example, another study found that in the Republic remaining 10%.79
of Korea, which has 100% reliance on gas imports,
the cost of liquefied natural gas (LNG) for power ii) Energy affordability
generation was USD 17 billion higher in 2022 than
2021, translating to an average increase of USD 326 There are pervasive misconceptions that clean
per person.81 energy technologies are always more expensive
than fossil fuel technologies, and that the energy
In the UK, wholesale gas prices increased more transition and net-zero policies are driving up
than fivefold in 2022 compared to the 2016–2019 the cost of living.83 Yet, as the previous section
average, resulting in the average household demonstrates, renewables are now almost always

Figure 6. Wholesale natural gas prices (solid lines) and wholesale European electricity prices (dashed
lines) from January 2019 to May 2022 (EUR/MWh).
Gas prices shown: UK National Balancing Point (NBP); European Benchmark TTF; LNG Northeast Asia JKM; and US
Henry Hub. Electricity prices across Europe were aggregated by gas dependency (GD) of electricity generation (high,
moderate, or limited) and grid interconnectedness (limited for high GD; well-connected for moderate GD).
See details in Ari et al. (2022), Figure 3.79

160
300
UK NBP

Wholesale electricity prices (EUR/MWh)

EU TTF
Wholesale gas prices (EUR/MWh)

120 LNG NE Asia

US HH
High GD 200
Mod GD
80 Low GD

100
40

0 0
Jan−2019 Jan−2020 Jan−2021 Jan−2022
 Opportunities and benefits of accelerating the energy transition 18

the least expensive option for new and existing and consumers alike. According to IRENA, the
electricity generation. Other technologies such as deployment of renewable power since 2000 had
EVs and energy-efficient appliances also typically cumulatively saved around USD 409 billion in fossil
result in cost savings over their lifetimes, even if fuel costs for the electricity sector alone by 2023,
they sometimes incur higher upfront costs.80 In fact, with the highest savings occurring in Asia, followed
growing pressures on today’s cost of living stem in by Europe and South America (Figure 7).45 Whereas
part from our continued fossil fuel dependency — importing fossil fuels entails a recurring expense,
directly through their volatile prices and impact importing renewable technologies is a one-off
on commodity prices as well as the high cost of investment. At 2024 prices, importing 1 GW of solar
maintaining fossil fuel subsidies, and indirectly panels could lead to savings equivalent to 30 years of
through the mounting toll of fossil-fuelled climate gas import costs over the average 30-year lifespan of
disasters and disruptions. solar panels.76

Even discounting abnormally high oil and gas Heavy reliance on importing fossil fuels with high
prices, the cost competitiveness of renewables and volatile prices places a particularly heavy
means they will yield energy cost savings in the strain on government budgets and constraint on
near and long term — for both governments economic development in developing countries

Figure 7. Cumulative fossil fuel cost savings in the electricity sector from renewable power additions
between 2000 and 2023 in different regions.

Asia South
USD 212 billion America
USD 53
billion

North
America
USD 19
Europe billion
Africa
USD 88 billion
USD 11 bn

Eurasia USD 12 billion Central America and the Caribbean USD 3 billion
Oceania USD 5 billion Middle East USD 5 billion
Data source: IRENA.45
 Opportunities and benefits of accelerating the energy transition 19

saddled with growing debt servicing costs. For systems. Stand-alone off-grid solar solutions were
example, around 60% of Small Island Developing estimated to serve 490 million people in total. Access
States (SIDS), who are among the most indebted to energy brings with it many other benefits, and
countries in the world, currently import over 90% the implementation of small-scale renewable
of their fossil fuel supply for electricity generation, energy microgrids has been shown to significantly
which on average costs around 10% of their GDP. The contribute to sustainable development by
Seychelles’ fossil fuel imports cost almost 18% of the improving livelihoods, reducing poverty, and
country’s GDP, while its debt amounts to almost 85% enhancing food security, health, and education.89,90
of GDP.84,85
The World Bank has further highlighted how solar
The IEA’s Strategies for Affordable and Fair Clean mini-grids could provide the least-cost solution to
Energy Transitions report details how, with targeted bring high-quality, uninterrupted electricity to 380
additional policies and investments, following a million people across Sub-Saharan Africa by 2030
1.5°C-aligned pathway towards global net-zero — a region with the largest access gap and where
emissions by 2050 can reduce the operating costs development gains are most urgently needed.91
of the global energy system by more than half
over the next decade compared with a trajectory ILO, IRENA, and UNEP have also highlighted the
based on current policies. The net result is a more importance of focusing more on renewables-
affordable energy system for consumers, businesses, based rather than fossil fuel-based clean cooking
and governments worldwide.80 solutions.64,92 Over the last decade, more policy
and financing attention has been given to liquefied
iii) Energy access petroleum gas (LPG)-based solutions, through the
support of large governmental contributions and
By the end of 2023, almost 92% of the world’s programmes. As a result, LPG has accounted for over
population had access to electricity. Yet more 70% of the progress made towards providing clean
than 666 million still lacked access, while some cooking access.88 However, guidelines for “clean
2.1 billion people (26%) lacked access to clean cooking” fuels and technologies (unlike for “clean
cooking technologies, leading to significant energy”) generally pertain only to fine particulate
negative environmental, public health, and matter (PM2.5) and carbon monoxide emissions
human livelihood impacts.86 For example, the World standards.93 LPG still emits GHG emissions and
Health Organization (WHO) estimates that around other harmful air pollutants such as nitrogen
3.2 million people die prematurely from illnesses oxides (see Annex for further details). For example,
attributable to household air pollution caused by the the multi-stakeholder Solar-Electric Cooking
incomplete combustion of solid fuels and kerosene Partnership, supported by UNEP, aims to provide
used for cooking.87 Energy access gaps are largest affordable clean cooking solutions across the African
in Sub-Saharan Africa, where some 565 million continent through solar e-cooking. This not only
people still had no access to electricity in 2023, reduces household air pollution and GHG emissions
accounting for 85% of the global population but also addresses gender-based violence and
without electricity access.86 deforestation while fostering economic development.94

As a joint 2024 report by the IEA, IRENA, UN, World Both IEA and IRENA have developed global
Bank, and WHO highlighted, achieving universal energy-transition pathways that are consistent
electricity access by 2030 will only be possible with limiting long-term warming to 1.5°C and
by deploying a combination of grid, mini-grid, that also deliver universal clean energy for all
and stand-alone off-grid solutions that leverage by 2030 (SDG 7).27,28 At the country level, the
the faster deployment of distributed renewables World Bank has developed “Country Climate and
to meet demand quickly, especially in difficult- Development Reports (CCDRs)” that explore how
to-reach rural locations where eight out of 10 development goals can be aligned with climate
people without electricity access live.88 In 2022, mitigation and adaptation efforts for 72 countries
2.5 million households gained electricity access and economies.x Power-sector modelling in these
via solar home systems and smaller solar lighting

x The World Bank Group’s individual CCDRs and synthesis reports are accessible at
https://www.worldbank.org/en/publication/country-climate-development-reports.
 Opportunities and benefits of accelerating the energy transition 20

CCDRs shows that solar and wind energy play a Beyond extreme climate conditions, renewables
significant role in meeting the growing demand also contribute to insulating power generation
for electricity at the lowest cost to consumers, even from external shocks, such as fossil fuel price
without considering climate objectives and driven by fluctuations and international trade and supply
economic considerations alone under current-policies chain disruptions. For example, a recent study
scenarios.95 When climate objectives are considered found that if EU member states achieved their 2030
in low-emissions development pathways, renewable solar and wind capacity targets, the sensitivity of
energy plays an even larger role and represents annual electricity prices to the cost of natural gas
almost all new capacity additions. For example, would be reduced by 29% on average. If solar and
in Moldova, investing in renewables and energy wind capacity installations were 30% higher than
efficiency is estimated to reduce energy import the 2030 targets, the sensitivity would be reduced
dependence from 78% to 40% by 2050. In fragile or by 65%.103 Furthermore, once installed, wind and
conflict countries, such as the Republic of Yemen or solar power plants are shielded from supply chain
Lebanon, distributed solar power can build community disruption risks for the rest of their operating
resilience by providing power for critical facilities, lifetime, unlike fossil fuel-fired power plants that
such as schools and hospitals. In most CCDRs, this usually have fuel reserves of a few months.104
transition towards renewable energy takes place
with total electricity costs declining over time, v) Job creation, economic growth, and
providing a gain for households and businesses. industrial competitiveness
iv) Power system resilience The implementation of climate policies to date
has substantially boosted the amount of green FDI
Power systems are increasingly under strain countries are able to attract. Policies to support green
from extreme weather events, aging grid products also have a more prominent impact on
infrastructure, and growing electricity demand, competitiveness and innovation in these products
which threaten the efficiency and reliability than policies targeting non-green products.10,60,105 As
of power generation, as well as the physical previously discussed, green industries and green
resilience of energy infrastructure.15,96 While some investments are already helping to boost economic
have mistakenly blamed the increasing integration development and jobs worldwide. The systematic
of variable renewables like wind and solar, the adoption of renewables and improvements in
primary causes are aging grid infrastructure and energy efficiency, combined with progressive
growing weather extremes, as further discussed policies, can continue to lead to net gains in jobs
in the next section. Renewables-dominant power and GDP as the transition progresses in the short,
systems can come with high reliability with proper medium, and long term.
governance, while fossil fuels-dominant systems do
not necessarily guarantee reliability. For example, Under IRENA’s 1.5°C Scenario for the global
in 2023, the shares of variable renewables in the energy transition, the world could see an average
electricity mix of Denmark, Germany, and the USA annual increase in GDP of 1.5% between 2023 and
were 68%, 44%, and 22% respectively, and their 2050, compared to a current-policies (“Planned
average power outage rates were around 30, 13, Energy”) scenario, due to macroeconomic
and 366 minutes per consumer respectively.97–99 effects such as greater levels of public and private
investment.106 The annual average GDP increase for
Decentralized and diversified renewables-based the Group of Twenty (G20) is estimated to be 1.3%
power systems also have an inherent potential — with individual increases of 1.3% for Brazil, 2.8%
to provide more resilience in the face of growing for India, 6.0% for China, and 8.3% for South Africa.
extreme weather events.15,100 Many solar-and- Meanwhile, increases of 5.4–15.3% are estimated for
storage microgrid initiatives are being developed different regions in Africa and 2.6% for Southeast
throughout the Caribbean, a region highly susceptible Asia. (These estimates do not factor in avoided
to hurricanes.101,102 Decentralized renewable energy climate damages.) The renewable energy sector is
can provide both immediate disaster response and predicted to grow significantly by 2050 under the
long-term climate resilience, especially in island 1.5°C Scenario, creating about 40 million direct
contexts where traditional fossil fuel-dependent grid jobs worldwide. Solar would make up nearly 66% of
infrastructure remains vulnerable. renewable energy jobs in the Middle East and North
 Opportunities and benefits of accelerating the energy transition 21

Africa (MENA), 52% in Asia, 38% in Europe, 32% in technology, engineering, and mathematics (STEM)-
North and South America, and 28% in Sub-Saharan educated workers and a more equal treatment
Africa. of women can also amplify the effectiveness of
climate policies by preventing bottlenecks in the
Furthermore, ILO has assessed the employment expansion of the workforce and boosting green
potential of the wider green transition for select innovation.109
countries, and explored the social, economic, and
employment impacts of green industrial growth vi) Additional socioeconomic and
opportunities for the MENA region.xi The assessment environmental benefits
found that MENA countries may face welfare losses
if they remain passive by-standers in the global As the above assessments alluded to, the transition
energy transition. Conversely, active engagement away from fossil fuels can help to deliver myriad
could lead to 3.5% higher employment (with a net other social, economic, and environmental
total of 6.6 million jobs created) and 4.8% higher objectives, including but not limited to poverty
GDP.107 This scenario implies strong industrial and reduction, improved air quality and health,
just transition policies — including social protection and enhanced economic development and
and relocation programmes for fossil fuel workers resilience.95,110 For example, IRENA has found that,
— alongside enhanced climate policies, especially in compared to a current-policies scenario, a systematic
solar power, electric mobility, and renewables-based shift away from fossil fuels towards a renewables-
hydrogen production. based energy system could lead to 6.4% higher GDP,
3.5% more economy-wide jobs, and 25.4% higher
The World Bank’s CCDRs also explored social welfare across Africa between now and 2050.111
opportunities for countries to increase their Similarly, Southeast Asia could see 3.4% higher GDP,
participation in key green technology value 1.0% more economy-wide jobs, and 10.9% higher
chains, creating new jobs while boosting incomes social welfare.112
and exports. They found that short-term economic
growth could be similar or even faster in low- One of the social welfare metrics assessed by IRENA
emissions development scenarios than in current- in the above studies is improved air quality and
policies scenarios in most countries, assuming public health.xii Air pollutants are released at every
well-designed policies and synergies between stage of the fossil fuel lifecycle, from exploration
structural reforms and a supportive environment.95 and extraction to end-use combustion. Decades
of epidemiological research has established that air
The energy transition also offers opportunities pollution can cause, complicate, or exacerbate many
to improve the gender balance of the energy adverse health conditions, leading to respiratory,
workforce. Despite accounting for 39% of the global heart, and neurological diseases and increasing
labour force, women made up less than 20% of the risks of cancer and pregnancy complications.113
the energy industry workforce in 2023.36 Globally, Globally, outdoor PM2.5 pollution from fossil fuel
women form a greater share of the renewable combustion is estimated to cause over five million
energy workforce (32%) than that of the oil and premature deaths each year — accounting for
gas industry (22%).108 For example, decentralized 82% of all premature deaths from outdoor PM2.5
solar PV employs 41% women in Kenya, 37% in pollution from human activities.114 Traffic-related
Ethiopia, 35% in Nigeria, and 28% in Uganda.37 air pollution from fossil fuel combustion is estimated
Nevertheless, their roles and participation across to cause two to four million new cases of asthma in
the renewable industry are not balanced. For children each year.115,116 One study estimated the
example, the representation of women in senior economic cost of air pollution from fossil fuels in
management positions is very low in both the wind 2018 to be USD 2.9 trillion, or 3.3% of global GDP.117
and solar PV sectors.36 A robust supply of science, Moreover, oil and gas production activities release a

xi ILO’s reports for Bangladesh, Brazil, China, India, Jordan, Lebanon, Malaysia, Mauritius, Mexico, Nigeria, the Philippines, Tunisia, Türkiye, Uruguay,
and Zimbabwe are accessible at
https://www.ilo.org/topics/just-transition-towards-environmentally-sustainable-economies-and-societies/green-jobs-assessment-reports.
xii The IRENA “Energy Transition Welfare Index” considers five dimensions — economic, social, environmental, distributional, and access — of the
energy transition. IRENA’s Socio-economic footprint of the energy transition reports are available for Africa, Egypt, Indonesia, Japan, Southeast
Asia, and South Africa.
 Opportunities and benefits of accelerating the energy transition 22

wide variety of harmful, toxic, and even radioactive

air, water, and waste pollutants that are known to
be carcinogenic or have adverse reproductive and
developmental effects.118–120

As a recent OECD-UNDP report explores in

detail, more ambitious climate policies can
simultaneously accelerate inclusive economic
growth and significantly reduce emissions
through increased investment in clean
technologies, improved energy efficiency, and the
strategic reinvestment of revenues from carbon
pricing or removal of fossil fuel subsidies.68
Compared to a current-policies scenario, enhancing
climate action would boost global GDP by 0.1% in
2030 and by 0.23% in 2040 due to macroeconomic
effects alone.xiii When some of the avoided climate
damages are also accounted for in the longer term,
such as physical impacts related to sea-level rise or
on agricultural crop yields, the benefits are estimated
to be 0.2–3% by 2050.

Beyond GDP impacts, the OECD-UNDP report also

shows that more integrated climate and development
policies could help to advance climate action while
also driving progress on other SDGs. The enhanced-
action scenario envisions a new paradigm of
energy security, with fossil fuel import volumes
decreasing by 30% in high-income countries and
by 17% in low-income countries in 2040 compared
to current levels. As previously discussed, this
would reduce exposure to volatile fossil fuel markets,
lower import bills, stabilize energy prices, and
enhance self-sufficiency. If investments in the energy
transition are complemented by specific measures
that deliver on food security, basic services access,
and governance reforms, nine out of ten low-
human-development countries could significantly
improve development by 2050, lifting 175 million
additional people out of extreme poverty while
strengthening resilience and energy equity.

Nevertheless, the clean energy transition will also

entail adverse impacts that must be addressed, such
as loss of jobs and revenues for fossil fuel-dependent
workers and communities, and the social and
environmental harms that can come from mining
the critical minerals that are essential for renewable
energy technologies. The next section explores some
of these challenges in more detail, as well as the major
barriers impeding a rapid and equitable transition.

xiii This scenario is associated with end-of-century warming of 1.7°C, compared to a current-policies scenario associated with 2.45°C.
 Barriers and challenges of the current transition 23

Section 4 — Barriers and challenges of the

current transition

As Section 2 showed, while the world has seen EMDEs, driven by rapid economic development,
remarkable progress in renewable energy urbanization, and population growth. However,
deployment in certain sectors and regions over the progress on the clean energy transition has
past decade, far less progress has been made in other thus far largely been concentrated in advanced
aspects of the just energy transition. Consequently, economies and China. Of the 4,448 GW of global
we remain far off track from meeting the overall total renewable capacity installed by the end
global 1.5°C-aligned energy-transition goals agreed of 2024, 41% was in China and 39% in OECD
to at COP28 (Table 2).xiv This section explores some countries. The remaining 20% was concentrated
of the key challenges, risks, and barriers that within a handful of countries, with Brazil and
must be addressed to accelerate the just energy India accounting for almost half.29 In 2023, China,
transition globally. the EU, and the USA accounted for 95% of global
EV sales.122
CHALLENGES AND RISKS
Since the Paris Agreement entered into force
in 2016, less than one out of every five dollars
i) Mobilizing adequate, accessible, and invested in clean energy has gone to EMDEs
affordable finance for developing countries to outside China.55 In 2024, they received around USD
accelerate their energy transitions: 300 billion, or 15% of global clean energy spending
(Figure 8). Africa, home to 20% of the world’s
Most of the additional energy demand over the population and 85% of the global population
next few years and decades is poised to come from without electricity access, received a mere 2%

Table 2. Select global energy-transition goals in the first Global Stocktake and projections for 2030 under
current-policies and 1.5°C-aligned scenarios modelled by the IEA and IRENA.
The annual values for 2022 are shown as the reference benchmarks, and those for 2024 demonstrate progress, or lack
thereof, since then.

2030 projections

Current plans
1.5°C-aligned
2022 2024 and policies

Renewables electricity capacity (GW)a 3,380 4,450 6,770 11,200

Annual rate of energy efficiency gainb 2% 1% 2% 4%

Total energy supply/demand from 505 519 505 375

fossil fuels (EJ)b

Sources: (a) Based on IRENA, with numbers shown here rounded to three significant figures;29,121 (b) IEA.55

xiv See also the UNEP Emissions Gap Report 2024, Table 6.1, for sub-sectoral 2030 energy-transition targets under 1.5°C-aligned scenarios
assessed in the IPCC Sixth Assessment Report (AR6).4
 Barriers and challenges of the current transition 24

of the global total.31,86 Yet, according to IRENA’s China to increase by around five to seven times
new analysis for this report, Africa's renewable by 2030 from the USD 260 billion invested in 2022
resource potential is ten times larger than the — far beyond the capacity of public financing
continent’s projected demand for electricity in alone and thereby demanding an unprecedented
2040 under a 1.5°C-aligned scenario.xv On a per mobilization of private capital. This represents
capita basis, the disparity in financial flow has a formidable investment imperative — and
been increasing over time: in 2016–2019, advanced opportunity.
economies attracted 14 times more clean energy
investment than the 154 EMDEs excluding China; in Since the Addis Ababa Action Agenda in 2015,
2020–2023, this had increased to 18 times.123 As of policymakers have been advocating for the use of
2023, more than 30 developing countries have yet to public resources to leverage private investment
register a single utility-sized international investment through mechanisms like risk mitigation.
project in renewables.75 However, these expectations have not been met —
in quantity or quality. Because the private sector
The IEA and the Independent High-Level Expert seeks risk-adjusted financial returns, it needs a
Group (IHLEG) on Climate Finance both estimate clear financial case for investing in clean energy
that clean energy-transition investments in technologies. However, as discussed below, the
EMDEs outside China would have to scale up to cost of capital for clean energy projects remains
around USD 1.4–1.9 trillion a year by 2030, and to disproportionately high in EMDEs outside China
over USD 2 trillion a year by 2035, to keep 1.5°C due to real and perceived market risks.75,123,126
in reach and deliver on the SDGs.124,125 Getting on
track for net-zero emissions by 2050 will therefore Furthermore, it is critical that public resources
require clean energy spending in EMDEs outside do not undermine energy-transition and climate

Figure 8. Annual clean energy investment in selected countries and regions in 2015 and 2024, USD billion.

China USA EU India Latin America Africa SE Asia

600

500
Annual invesment (USD billion)

400

300

200

100

0
2015 2024 2015 2024 2015 2024 2015 2024 2015 2024 2015 2024 2015 2024

Renewable power Energy efficiency and end−use Grids and storage Others

Data source: IEA.31

xv Analysis based on IRENA’s Global Atlas for Renewable Energy, https://globalatlas.irena.org.

 Barriers and challenges of the current transition 25

policy goals: countries should redirect the lending total annual electricity consumption today.
policies of national, regional, and multilateral So far, both natural gas and renewables have
development banks and DFIs, as well as investments been the main sources of electricity supply
by state-owned enterprises, accordingly. In particular, for data centres.130 IMF simulations show that
DFIs should lead the financing of energy-transition renewable energy expansion has the potential to
projects where upfront costs are high and returns mitigate the impact of increased energy demand
may be slow to materialize, such as grid infrastructure on energy prices while reducing AI-related GHG
expansion and modernization projects.127,128 emissions.131 At the same time, digital technologies
including AI have the potential to help speed
Currency risks and debt vulnerabilities have also up the energy transition as electricity networks
been identified as key barriers to sustainable become more decentralized and digitalized. For
infrastructure investments in developing example, AI can help improve the forecasting
countries, which are facing the worst debt crisis and integration of variable renewable energy
since records began, with debt service absorbing generation and electricity-access mapping.130,132
an average of 38% of budget revenue, rising to
54% in Africa.129 At the same time, investments in • Extreme heat in urban centres drove up
developing local clean energy supply chains, which demand for cooling in 2024, accounting for
are crucial for increasing supply chain diversification almost all of the 1.4% increase in fossil fuel-
and resilience, minimizing reliance on imports, and based electricity generation from the previous
maximizing socio-economic benefits, are increasingly year.30 Cooling is a double burden on the
concentrated in a small number of countries. climate: air conditioners and refrigerators create
For instance, China accounted for 88% of global indirect emissions from electricity consumption
investments in the solar PV supply chain between and direct emissions from the release of
2018 and 2023. The USA and Europe accounted for refrigerant gases, the majority of which are much
2% each, while the remainder was shared between more potent global warming pollutants than CO2.
Southeast Asian economies (4%), India (1%), and the Cooling currently accounts for almost 20% of
rest of the world (3%).121 global electricity use in buildings. Based on
current policies, the global installed capacity of
As further detailed below, such barriers would need cooling equipment is set to almost triple between
to be addressed to scale up clean energy finance and 2022 and 2050, reaching 58,000 GW in 2050. This
investments for developing countries: on the demand would require an estimated 2,000–2,800 GW of
side, the lack of policy and regulatory frameworks additional electricity capacity under business-as-
and project pipeline readiness to attract clean energy usual energy efficiency assumptions.133
investments; on the intermediation side, insufficient
and inefficient use of blended finance and other iii) Vulnerabilities and risks in clean energy
risk mitigation instruments to lower clean energy technology supply chains:
financing costs; and on the supply side, the lack of
domestic financial markets for clean energy. • The geographic concentration of raw materials
processing and manufacturing capacity for
clean energy technology creates risks for the
ii) Structural increases in electricity demand:
security and resilience of supply chains. Almost
• In recent years, advanced economies have all of today’s global manufacturing capacity for
seen a surge in electricity demand from bitcoin solar PV is in the Indo-Pacific region, most notably
mining, which has intensified with the rapid in China. China currently holds at least 60% of
development of AI and the proliferation of the world’s manufacturing capacity for solar PV,
energy-intensive data centres. A typical AI- wind systems, and batteries. Meanwhile, the
focused data centre today consumes as much production and processing of critical minerals
electricity as 100,000 households, but the largest is also highly concentrated geographically.
currently under construction will consume Currently, the Democratic Republic of Congo
20 times as much. Data centres accounted supplies 70% of cobalt, China 60% of rare earth
for around 1.5% of the world’s electricity elements (REEs), and Indonesia 40% of nickel.
consumption in 2024, or 415 TWh. This figure is Australia and Chile account for 55% and 25% of
set to more than double by 2030 to around 945 lithium mining respectively. China is responsible
TWh, which is roughly equivalent to Japan’s
 Barriers and challenges of the current transition 26

for the refining of 90% of REEs and 60–70% of fuel-producing low- and lower-middle income
lithium and cobalt.134 countries, as well as adequate international
responses, remain underexplored.143 A growing
• Furthermore, without proper governance, body of research, rooted in the equity and climate
increasing demand for critical minerals risks justice movement, argues that a global equitable
perpetuating commodity dependence and transition should recognize that countries’
exacerbating both geopolitical tensions and circumstances differ widely depending on their
environmental and social challenges, including financial and institutional capacity to transition,
impacts on livelihoods, the environment, as well as their level of socioeconomic dependence
health, human security, and human rights — on fossil fuels.144,145 Based on these principles, one
all of which can undermine the just energy might expect higher-income countries and those
transition. Demand for critical minerals is set less dependent on the fossil fuel economy for social
to almost triple by 2030 as the world transitions welfare and jobs to lead the transition, while lower-
from fossil fuels to renewable energy. A transition capacity countries will require finance and support
of this magnitude brings with it tremendous to pursue alternative low-carbon and climate-
opportunities but also substantial challenges. At resilient economic development and just transitions.
all scales, mining has too often been linked with However, left to existing policies and market
human rights abuses, environmental degradation, forces alone — without further international
and conflict. Resourcing the clean energy cooperation and without coordination of demand-
transition requires a new paradigm rooted in and supply-side policies — the transition risks
equity and justice.135,136 being highly inequitable and disorderly.115,144,145

iv) Weather and climate volatility: INSTITUTIONAL, MACROECONOMIC, AND

Centralized and decentralized renewable energy LEGAL BARRIERS
systems are increasingly exposed to climate
risks: droughts reducing hydropower, shifting
i) A lack of enabling energy infrastructure:
wind patterns, extreme heat impeding solar
efficiency, and rising sea levels and coastal floods • Parallel developments, investments, and
threatening energy infrastructure. As a result, governance in enabling infrastructure
these forms of power generation will require robust — especially in storage capacity; grid
infrastructure frameworks to ensure these assets modernization, flexibility, and digitalization;
are able to withstand extreme weather conditions. and electrification of end-use sectors — will
This means designing technical specifications and be vital for allowing renewable capacity
construction practices that account for increasingly installations to be integrated securely to
severe climate conditions and allowing project displace fossil fuel-based power generation.
operators to monitor systems in real-time and While investment in renewable power has
respond pre-emptively.137 Integrating seasonal been increasing rapidly, global investment in
climate forecasts into energy planning will also be grids has barely changed, remaining static at
increasingly important to navigate the challenges around USD 300 billion/year. Today, for every
of climate variability to secure a stable and resilient dollar spent on renewable power, only 60
clean energy future.138 cents are spent on grids and storage; this
investment ratio needs to rebalance to 1:1.55
v) Ensuring a just, orderly, and equitable global There are already signs of grids becoming
a bottleneck for the energy transition. At
transition away from fossil fuels:
least 3,000 GW of renewable power projects,
The production and consumption of coal, oil, of which 1,500 GW are in advanced stages, are
and gas need to decline rapidly and substantially waiting in grid connection queues.146 Greater
to limit long-term warming to 1.5°C.139,140 The attention must also be paid to addressing the
transition risk associated with stranded fossil fuel flaws and limitations of existing governance
assets has been estimated in the billions to trillions systems for how grids are planned, built, and
of dollars, with different geographic distributions operated.147
for coal versus oil and gas.141,142 However, the
associated development ramifications for fossil
 Barriers and challenges of the current transition 27

ii) Policy incoherence exists across multiple consumption amounted to USD 1.1 trillion in
levels and dimensions: 2023.150 In an analysis by Black et al. (2023)
that considers both the undercharging of
• Discordant policies and silos between
energy supply costs (explicit subsidies) and the
ministries can impede and undermine
environmental costs and forgone consumption
progress. Across NDCs submitted as of August
taxes (implicit subsidies), total fossil fuel subsidies
2024, 149 Parties have included quantifiable
are estimated at USD 7 trillion in 2022 (7.1% of
renewable energy targets, primarily for the
global GDP), with implicit subsidies making up
power sector. These commitments combined
82% of the total.151
are set to deliver less than half the required
1.5°C-aligned growth in renewable power by • At COP26 in 2021, 34 countries and five public
2030.121 Many commitments remain conditional finance institutions signed the Clean Energy
on international financial assistance, particularly Transition Partnership (CETP) Statement
among Least Developed Countries and SIDS. At to end international public finance for
the same time, among the top 20 largest fossil unabated fossil fuel projects by the end of
fuel-producing countries, nearly half of the NDCs 2022 and instead prioritize the clean energy
and around one-third of long-term low-emissions transition.152 Collectively, signatories still sent
development strategies (LT-LEDS) submitted as of USD 5.2 billion to the fossil fuel sector in 2023, but
March 2024 include plans to continue or increase this was nonetheless a reduction of up to two-
fossil fuel production.148 As the UNEP Production thirds from the 2019–2021 average. Meanwhile,
Gap Report series has shown, government support for clean energy has not scaled up
plans for coal, oil, and gas production under significantly, with an increase of only 16% in this
national energy strategies and outlooks timeframe.153
assessed as of 2023 would lead to global levels
of fossil fuel production in 2030 that are more
than double those aligned with 1.5°C, with the
iii) A lack of or insufficient long-term strategies
production gap widening over time to 2050.140 for net-zero energy systems:

• Global decarbonization incentives remain • Long-term, integrated national energy

strategies are a vital planning tool for guiding
insufficient and skewed. Carbon pricing
the transition to a net-zero and increasingly
continues to be adopted by countries, having
renewables-based energy system, but few
doubled in global GHG emissions coverage
countries have developed them.154 More
from 12% in 2015 to 25% in 2023, but the global
policy attention needs to be paid, for example,
average carbon price stands at only USD 5 per
to designing what has been termed the “mid-
tonne of CO2e (USD/tCO2e), compared to the
transition”, during which new, zero-carbon
minimum of 85 USD/tCO2e needed to achieve 2°C,
energy systems are developed under existing
and even higher for 1.5°C.9 A mix of context-
fossil fuel-based system constraints.155
specific policies, including carbon pricing, is
needed to incentivize decarbonization.149
iv) A lack of focus on social justice and just
• Government subsidies for fossil fuels remain
energy-transition policies:
high. While various estimates differ in terms
of the underlying scope and methodologies, • At the same time, a lack of policy attention
subsidies typically reflect policies that reduce the to ensure a truly just energy transition —
cost of production or the price for consumers. especially for affected fossil fuel workers and
For example, the IEA estimates that in 2023, communities and the wider local economy —
governments spent USD 620 billion subsidizing can cause political backlash and opposition
fossil fuel consumption. This amount is to climate action.68 The IPCC AR6 underscored
significantly above the USD 70 billion that that “adaptation and mitigation actions that
was spent on support for consumer-facing prioritize equity, social justice, climate justice,
clean energy investments, including grants rights-based approaches, and inclusivity, lead to
or rebates for EVs, efficiency improvements, or more sustainable outcomes, reduce trade-offs,
heat pumps.80 The IISD-OECD tracker estimates support transformative change, and advance
that subsidies for fossil fuel production and climate resilient development”.156 It will be vital to
 Barriers and challenges of the current transition 28

integrate just transition measures within energy- space and lack of affordable finance — remain
transition planning, such as promoting decent a major barrier for EMDEs outside China.
work and equitable access to reskilling/upskilling For example, a 2023 survey by the IEA found
opportunities for workers in the fossil fuel that the cost of capital for utility-scale solar PV
industry, financing the energy transition using projects in EMDEs is well over twice as high as it
progressive measures, and building social and is in advanced economies.162 A survey by IRENA
political acceptance of new policies.157,158 Inclusive found that in 2019–2021, average regional cost of
planning processes, including through social capital for onshore wind was 3% in China, 3.3%
dialogue and meaningful public engagement, will in Western Europe, 5.1% in North America, 6.4%
be key to ensure public trust and support. in Latin America, and 7.2% in other Asia-Pacific
countries and Africa. For utility-scale solar PV,
• In some countries, other sectors will also be average regional cost of capital was 3.9% in China,
impacted. For example, in Nigeria the firewood 4% in Western Europe, 5.4% in North America,
and charcoal industry is completely informal but 6.1% in other Asia-Pacific countries, 6.6% in Latin
involves some 41 million workers and provides America, 7.7% in Eastern Europe, and 8.7% in the
an estimated 530,000 full-time equivalent direct Middle East and Africa.163
jobs, compared to 70,000 direct jobs in the oil
and gas sector. A just energy transition in Nigeria
thus requires a focus on charcoal- and wood- vi) Trade policies and investment agreements
producing workers and households in addition to can serve as barriers or enablers:
fossil fuel-based energy sector workers.159
• As noted by the IPCC AR6, many international
investment agreements (IIAs) include Investor-
v) A lack of enabling conditions to scale up State Dispute Settlement (ISDS) provisions
clean energy financing for developing countries: that could be used by fossil fuel interests
to challenge national legislation aimed
• Improving domestic enabling conditions will at transitioning away from fossil fuels.164
be key for building investor confidence — by Governments worldwide could face up to USD 340
developing clear and stable policy and regulatory billion in legal and financial risks for cancelling
frameworks, creating robust net-zero roadmaps fossil fuel projects that are subject to treaties with
and investment strategies aligned with broader ISDS clauses, with more than two-thirds of the
economic development goals, and improving estimated risk borne by developing countries.165,166
project pipeline preparation and visibility. For Fossil fuel-related disputes account for nearly
example, national policies — including incentives 20% of all known ISDS cases, making the sector
for EV adoption to create domestic markets, tax the most litigious within the ISDS system.167 This
breaks for charging stations, and production underscores the urgent need to reform the IIA
subsidies to incentivize investors — have been regime to align with global climate and energy-
instrumental in mobilizing FDI for EVs in transition goals.168,169
countries like Hungary, Indonesia, Mexico, and
Thailand.60 • Trade costs along solar and wind energy
technology value chains remain high. Currently,
• Designing and implementing innovative developing countries’ average tariffs on such
financing, de-risking, and economic goods range from 2.5% in Asia and Oceania to
instruments will be crucial for lowering 7.1% in Africa. Non-tariff border measures add
the cost of capital. The public sector can, for additional costs of 0.4–0.7%.170 The rise in trade
example, strategically provide concessional restrictions poses significant risks to renewable
capital to mobilize private capital and mitigate energy technologies and critical mineral
certain risks that private sector capital cannot markets.171 Under an illustrative model scenario,
yet absorb. It can also improve debt structuring IMF simulations suggest that a disruption in the
and management, and reform credit rating trade of critical minerals could lower investment
methodologies.124,126,160,161 Although the LCOEs in renewable energy and EVs by as much as 30%
for solar PV and onshore wind are now almost by 2030.172
always cheaper than those for fossil fuels,
high upfront cost of capital due to real and • Lowering tariffs on goods across renewable
perceived risks — combined with limited fiscal energy value chains and other supportive
 Barriers and challenges of the current transition 29

provisions in trade agreements can help to misinformation that delay the need to reduce
increase imports and green FDI into EMDEs. fossil fuel reliance, including false claims about
For example, Hasna et al. (2023) found that a one renewable energy technologies to undermine
standard deviation reduction in tariffs on low- support for them.177–180
carbon technologies (LCT) is associated with a
4% increase in the LCT-trade-to-GDP ratio and • To date, the oil and gas industry has done little to
a 6% increase in LCT imports.10 An analysis of diversify their activities into clean energy.181 In
renewable energy policies worldwide by UNCTAD 2022, the industry invested USD 20 billion — 2.5%
found that the use of auctions and tenders is of its total capital spending — on clean energy
gaining momentum across all countries.75 projects, compared to the USD 800 billion annual
investments in oil and gas supply.182
• South-South trade and regional integration can
also help to strengthen developing countries’
participation in renewable energy value
chains.170

vii) Continued fossil fuel expansions and lock-in:

The committed CO2 emissions from existing
fossil fuel production and consumption
infrastructure each exceed the remaining carbon
budget for limiting warming to 1.5°C with a
50% likelihood, rendering any new fossil fuel
projects incompatible with the 1.5°C goal and
creating asset-stranding risks.156,173 Yet, on the
consumption side, as of January 2025, the world
has around 611 GW of coal-fired power capacity
under development, and 800 GW of gas- and oil-
fired power capacity under development.174,175 In
2024, global coal power additions dropped to their
lowest level in 20 years, but the world’s coal fleet still
increased by 0.9%. Just ten countries now account
for 96% of global coal power development, led by far
by China, followed by India and Indonesia. On the
production side, in 2024, a total of 895 licences
were awarded for, and USD 22.9 billion of capital
invested in, oil and gas exploration. The licences
could lead to emissions of around 1.7 billion
tonnes of CO2 if the reserves are burnt.176

viii) Lobbying, disinformation, greenwashing,

and delaying tactics by fossil fuel interests and
enablers:
• Political action to mitigate climate change has
been impeded at the national, regional, and
international levels through direct lobbying by
fossil fuel companies and through the funding of
political actors that remains largely undisclosed.
A growing body of academic research and
investigative journalism has also documented
how, for decades, vested interests have
developed strategies to both directly discredit
climate science and spread disinformation and
 Seizing the moment of opportunity 30

Section 5 — Seizing the moment of

opportunity

As the previous sections demonstrated, the follow the first Global Stocktake guidance in terms of
world stands on the cusp of a new energy era aligning with 1.5°C and covering all sectors and all
that can deliver immense economic, climate, GHGs. They should also demonstrate how countries
and sustainable development benefits. We are will contribute to global 1.5°C-aligned energy-
presented with an unprecedented moment of transition goals and align with long-term net-zero
opportunity to deliver the policies, frameworks, strategies.
and infrastructure needed to capitalize on the
falling costs and abundant potential of renewable iii) Strengthen domestic enabling environments
energy to unlock the transition globally — to attract renewable energy investments and
particularly in developing countries where develop domestic markets — including embedding
renewable resources are vast and access needs climate and energy-transition goals into national
are greatest. But this window of opportunity will legislation, clear and stable regulatory and legal
be missed if we fail to act with urgency or to work frameworks for investment and offtake pricing
together. The barriers and challenges outlined in commitments, governance reforms, improved project
Section 4 must be addressed to accelerate a fast, pipeline readiness and visibility, and, where relevant,
fair, and funded transition. regional energy integration.

This section identifies six priority areas for the iv) Leverage public-private partnerships to drive
international community to accelerate the new the transition and green industrial development.
era of energy powered by renewables, efficiency,
and electrification. v) Reform or end domestic fossil fuel subsidies
and implement effective domestic carbon pricing
#1 PROVIDE POLICY COHERENCE, CLARITY, mechanisms while protecting low-income and
vulnerable communities through progressive
AND CERTAINTY
policy design.

Governments should align policies, incentives, vi) End public finance for international fossil fuel
and resources to seize the benefits of the emerging projects to redirect resources towards the just
renewable energy economy: energy transition.

i) Develop just energy-transition roadmaps as #2 INVEST IN ENABLING INFRASTRUCTURE

part of national strategies for strengthening green
industrialization and economic competitiveness,
FOR THE 21st CENTURY ENERGY SYSTEM
and to help coordinate the rapid rollout of
renewable energy technologies and transition The surge in renewable capacity must be
away from fossil fuels towards net-zero energy supported by parallel developments in modern
systems by 2050 at the latest, with developed and flexible grid and storage infrastructure to
countries taking the lead. rapidly scale up the share of renewables in total
power generation. Meeting the global goals of
ii) Seize the opportunity presented by the next tripling renewable capacity and doubling energy
generation of NDCs by COP30 to lay out concrete efficiency should lead to the share of renewables in
and quantifiable energy-transition priorities and global power generation reaching around 60–70% by
targets out to 2035 and provide the policy clarity 2030 and 80% by 2035.xvi
necessary to attract investments. New NDCs should

xvi Based on 1.5°C-aligned global energy-transition scenarios modelled by the IEA and IRENA.27,28
 Seizing the moment of opportunity 31

i) Prioritize investments in energy storage, #4 PLACE PEOPLE AND EQUITY AT THE

EV charging stations, and grid expansion, HEART OF THE JUST ENERGY TRANSITION TO
modernization, and flexibility — including DRIVE INCLUSIVE ECONOMIC DEVELOPMENT
through leveraging digital technologies:

• Achieve a global energy storage capacity of i) Deliver universal clean electricity and clean
1,500 GW by 2030, including 1,200 GW in battery cooking access for all by 2030 by leveraging the
storage. combination of grid, mini-grid, and off-grid
renewables-based solutions.
• Double investments in electricity transmission
and distribution grids from current levels,
ii) Ensure energy affordability in the transition.
reaching USD 680 billion/year by 2030.
As discussed in Section 3, transitioning to primarily
• Invest in regional grid interconnections that can renewables-based energy systems will deliver
help drive faster renewable energy integration cost savings for consumers, businesses, and
and improve the security of supply. governments. Nevertheless, governments should
include progressive policies to ensure they are not
• Reforms in grid governance will also be crucial, exacerbating economic hardship for lower-income
especially in countries with full or majority state- and vulnerable communities.
owned utilities.
iii) Ensure a just transition for workers and
ii) Accelerate energy efficiency improvements and communities affected by the transition through
electrification of all end-use sectors: buildings, strengthening social protection measures,
transport, and industry. In particular: providing training and reskilling opportunities,
and engaging all relevant stakeholders through
• Achieve a share of electricity in global final
energy consumption of at least 30% by 2030. inclusive dialogues and consultations.

• Near-zero emissions and climate-resilient iv) Expand opportunities for technical and
buildings should be the new normal by 2030. vocational education and training in the clean
energy sector for women, youth, minorities, and
• Improve energy efficiency of cooling and heating other marginalized and vulnerable groups.
technologies by 50% by 2030.
v) Recognize that countries’ existing dependence
#3 MEET NEW ELECTRICITY DEMAND WITH on, and capacity to transition away from, the
RENEWABLES, ESPECIALLY FOR RAPIDLY fossil fuel economy vary widely, and countries
will therefore have different transition pathways.
GROWING SECTORS LIKE BIG TECH — IN
Encourage those with higher capacity to transition
PARTICULAR FOR AI AND DATA CENTRES faster, while supporting low-capacity and high-
dependence developing countries. Country platforms
Growing energy demand can and should be met offer a promising mechanism for support, but
by renewables and other clean energy sources. key challenges need to be overcome for effective
Renewables are now the cheapest and quickest implementation, including: aligning political
option for new power generation, making up 92.5% commitments with national strategies and regulatory
of global power capacity additions and 74% of global frameworks; increasing concessional finance targeted
power generation growth in 2024. at mobilizing greater private capital; developing in-
country technical, planning, and modelling capacity;
i) Governments should strive to meet all new and addressing vested interests and the political
electricity demand with renewables, leveraging the economy of transitioning away from fossil fuels.
lower average lifetime costs of renewables compared
to fossil fuels for new power generation and avoiding vi) Apply the seven Guiding Principles and
future stranded assets. implement the five Actionable Recommendations
from the UN High-Level Panel on Critical Energy
ii) Major tech firms should commit to powering Transition Minerals throughout the critical
their operations with 100% renewables by 2030. minerals value chain.135
 Seizing the moment of opportunity 32

#5 SUPERCHARGE THE TRANSITION BY • Expand the capacities of multilateral, regional,

INCREASING COOPERATION ON TRADE AND and national development banks to support
INVESTMENT just energy transitions — including through
increasing concessional financing, strengthening
credit enhancement tools, increasing local
Trade policies and investment agreements should currency lending and risk hedging, and
be designed to boost the energy transition. expanding capacity building and technical
Governments should pursue robust cooperation to: assistance.

i) Increase the diversification, resilience, • Leverage innovative de-risking and risk-

and security of global clean energy supply sharing mechanisms to mobilize private
chains, including broadening opportunities for finance at scale, especially for renewable
developing countries to participate by supporting energy and grid infrastructure projects where
them to design and implement integrated green upfront costs are high and returns may be slow
energy-industry strategies to enter the renewable to materialize. DFIs should expand their support
energy value chain and attract investment. for such projects, take on more risk, and avoid
crowding out private investments.
ii) Strengthen trade and investment in clean
energy technologies by lowering tariffs and other • Work with credit rating agencies to update
barriers on clean energy goods, and through new their methodologies to reduce the gap between
models of bilateral and plurilateral clean energy real and perceived risks stemming from
cooperation — including through South-South subjective biases and to account for the economic
cooperation and collaboration. growth prospects in developing countries through
accelerating the clean energy transition.
iii) Fast-track the replacement and modernization
of investment treaties. IIAs should be reformed
• Work with capital providers (domestic and
international) to better distinguish between
and redesigned to align with climate and real and perceived risk when investing in
sustainable development imperatives, mitigate developing countries with high renewable
risks and liabilities of ISDS provisions, reduce resource potential including through increasing
policy constraints to pursue clean energy-based understanding of clean energy technologies so
industrialization, and foster cooperation for the that risk is adequately priced.
promotion and facilitation of sustainable investment.
• Create long-term currency financing
#6 DISMANTLE STRUCTURAL BARRIERS TO mechanisms through domestic financial market
MOBILIZE ENERGY-TRANSITION FINANCE development. Leverage models that have scaled
in EMDEs (such as mobile banking) by working
FOR DEVELOPING COUNTRIES with domestic financial institutions to develop
green lending capabilities.
Mobilizing funds for the clean energy transition
in developing countries hinges upon tackling • Build robust project preparation and pipeline
persistent and systemic barriers in the development facilities. Work with technical
international financial architecture, demystifying assistance providers to establish dedicated
perceived risks, and addressing real risks to facilities that bring clean energy projects to
bring down the cost of capital — for both debt and bankable standards before presenting them to
equity financing. investors.

In addition to the calls outlined in the UN Pact

for the Future to reform the international
financial and debt architecture so that developing
countries can achieve their climate and
sustainable development goals, solutions targeted
at mobilizing energy-transition finance and
investments include, but are not limited to:183
 Data and terminology 33

Annex: Data and terminology

Throughout the report, unless otherwise specified, LCOE represents the average cost of electricity
“renewable energy” refers to both “infinite” generation from a technology considering all
renewable sources such as solar, wind, hydropower, costs incurred over its lifetime, including upfront
and geothermal as well as “cyclical” sources such investment, financing costs, operation and
as modern biofuels — consistent with the UN maintenance, fuel costs, and carbon pricing where
International Recommendations for Energy Statistics. relevant. It is often used as a metric for power
The definition of “clean energy” can vary among plants and can also be used for the average cost of
the cited data and references but generally refers to battery storage, if the charging costs are considered
sources that produce little to no GHG emissions during as fuel costs. It can be applied to battery storage in
energy generation. For example, the IEA’s definition of stand-alone applications or when paired with other
clean energy technologies includes renewable power, technologies, such as solar PV. For technologies
EVs, heat pumps, energy efficiency measures, and that operate in similar ways, the LCOE provides a
nuclear. Please refer to the citations for details. common and suitable metric for comparison.

Given the variety of data sources analyzed and cited FDI is defined as an investment involving a long-
throughout the report, some minor discrepancies can term relationship and reflecting a lasting interest
exist between datasets from different institutions. and control by a resident entity (the foreign direct
This report reflects data finalized as of 24 June 2025. investor or parent enterprise) of one country in an
enterprise (foreign affiliate) resident in a different
The term “clean cooking” defines cooking solutions country. FDI can take the form of either greenfield
that achieve ISO Tier 4 and 5 of the multi-tier investment or a merger or acquisition. Greenfield FDI
frameworks for clean cooking or technologies is new investment made by setting up a new foreign
that attain the fine particulate matter and carbon affiliate.
monoxide levels recommended in the WHO’s global
air quality guidelines.93 Clean cooking fuels and On fossil fuel and clean energy employment statistics,
technologies include stoves powered by electricity, the IEA’s estimates include the direct employment
LPG, natural gas, biogas, solar, and alcohol. effects of investment and activity in the energy
Renewables-based clean cooking solutions narrow supply sectors (e.g. oil, gas, power) and energy-
down the specificity of the clean cooking definition to using technologies (e.g. heat pumps, vehicles). They
encompass only technologies that utilize renewable also include indirect jobs generated through the
fuel sources. These include biogas, bioethanol, solid manufacture, construction, and installation of core
biomass, and renewables-based electricity. energy-supplying and energy-using facilities and
devices. For the renewable sector specifically, the
Electricity capacity refers to the maximum amount estimates by IRENA and ILO include direct jobs
of output that an electricity generator can physically generated by renewable energy deployment (e.g.,
produce (or accept in the case of an electricity storage rooftop solar installations) and indirect jobs from
device), and is typically measured in watts (W). activities in the upstream and midstream industries
Electricity generation refers to the amount of output that supply and support the core activities of
that is actually generated over a given period of time renewable energy deployment (e.g., manufacturing,
and is typically measured in kilowatt-hours (kWh). construction, and operation of facilities).
(1 kW = 1,000 W, and 1 kWh is one hour of using
electricity at a rate of 1,000 W.)
 References 34

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