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ISBN: 978-92-9260-480-6
eBook ISBN: 978-92-9260-505-6

Citation: IRENA (2022), Renewable energy targets in 2022: A guide to design, International Renewable Energy Agency, Abu Dhabi.

ABOUT IRENA

The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a sustainable energy future and serves as the principal platform for international co-operation, a centre of excellence, and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. www.irena.org

ACKNOWLEDGEMENTS

This report was developed under the guidance of Rabia Ferroukhi (Director, IRENA Knowledge, Policy and Finance Centre) and Ute Collier, and authored by Diala Hawila, Faran Rana, Abdullah Abou Ali and Arslan Khalid (IRENA), Costanza Strinati and Sufyan Diab (former IRENA colleagues), Miquel Muñoz Cabré (Stockholm Environment Institute), David Jacobs (IET Consulting) and Toby Couture (E3 Analytics), with valuable contributions from Adrian Whiteman, Nazik Elhassan, Sonia Rueda Silva, Emanuele Bianco, Jinlei Feng, Imen Gherboudj, and Gerardo Escamilla (IRENA), Paola Pérez (Tufts University) and Michelle Benaderet (Boston University).

Valuable review and feedback were provided by IRENA colleagues Aleksandra Prodan, Álvaro López-Peña, Arieta Gonelevu Rakai, Badariah Yosiyana, Binu Parthan, Camilo Ramirez Isaza, Elizabeth Njoki Wanjiru, Ines Jacob, Joong Yeop Lee, José Torón, Kamlesh Dookayka, Kamran Siddiqui, Karanpreet Kaur, Margaret Suh, Nadia Mohammed, Petya Icheva, Paul Komor, Simon Benmarraze, Toyo Kawabata, Wilson Matekenya and Zoheir Hamedi. Valuable external review was provided by Katarina Uherova Hasbani (AESG). The report was edited by Justin French-Brooks. Cover image credits: shutterstock.com and freepic.com.

IRENA is grateful for the generous support for this report provided by the Walloon government.

For further information or to provide feedback: publications@irena.org.

Available for download: www.irena.org/publications.

DISCLAIMER

This publication and the material herein are provided “as is”. All reasonable precautions have been taken by IRENA to verify the reliability of the material in this publication. However, neither IRENA nor any of its officials, agents, data or other third-party content providers provides a warranty of any kind, either expressed or implied, and they accept no responsibility or liability for any consequence of use of the publication or material herein.

The information contained herein does not necessarily represent the views of all Members of IRENA. The mention of specific companies or certain projects or products does not imply that they are endorsed or recommended by IRENA in preference to others of a similar nature that are not mentioned. The designations employed and the presentation of material herein do not imply the expression of any opinion on the part of IRENA concerning the legal status of any region, country, territory, city or area or of its authorities, or concerning the delimitation of frontiers or boundaries.

FIGURES

Figure S1 Renewable energy targets in NDCs (as of 16 October 2022)

Figure S2 Number of countries with renewable power targets in NDCs and national energy plans, by region and country grouping

Figure S3 Global cumulative renewable power, installed capacity, historical trends and future projections

Figure S4 Aggregate targeted renewable electricity capacity by 2030 by region, country grouping, and technology

Figure S5 Key decisions for renewable energy target setting

Figure 1.1 CO₂ emission trajectories based on COP26 announcements and the WETO 1.5°C Scenario

Figure 1.2 NDCs by ambition and share of global emissions (as of 16 October 2022)

Figure 1.3 Renewable energy targets in NDCs (as of 16 October 2022)

Figure 1.4 Companies net zero targets by status as of August 2022

Figure 2.1 Role of targets at different stages of policy-making

Figure 2.2 The role of renewable energy in the energy transition

Figure 2.3 Hydrogen strategies, including those in preparation as of June 2022

Figure 2.4 Total electrolyser 2030 targets, globally, as of September 2022

Figure 2.5 Number of cities with renewable energy targets, by region as of the end of 2021

Figure 2.6 Companies with 100% renewable energy targets by sector, as of August 2022

Figure 2.7 Aggregate targeted renewable electricity capacity by 2030 by region, country grouping and technology

Figure 2.8 Aggregate targeted renewable electricity capacity by 2030, by technology, total target capacity (left) and remaining target capacity (right)

Figure 2.9 Progress made on aggregated targets for 2030, by region, as of 2021

Figure 2.10 Global cumulative installed capacity of renewable power, historical trends and future projections

Figure 2.11 Global renewable power installed capacity in 2021, targeted capacity by 2030 and level needed as per IRENA’s 1.5°C Scenario

Figure 2.12 Number of countries with renewable power targets in NDCs and national energy plans, by region and country grouping

Figure 3.1 Key decisions for renewable energy target setting

Figure 3.2 Percentage of population with access to electricity and clean cooking to reach the targets set in SDG7

Figure 3.3 Factors affecting future electricity demand

Figure 3.4 Spectrum of renewable energy targets

Figure 3.5 Evolution of renewable energy targets in the European Union

Figure 3.6 Data needed before the setting of the target, while monitoring the progress and after the achievement of the target

TABLES

Table 1.1 Jurisdictions with net zero pledges, divided into high emitters (G20), low emitters (LDCs and SIDS) and others according to the Net Zero Tracker by October 2022

Table 1.2 Coal-phase out commitments and plans of selected countries

Table 3.1 Decision on the statistical basis of targets

Table 3.2 Decision on the scope of targets – sector coverage and end uses

Table 3.3 Decision on the indicator for share of total energy targets – TPES or TFEC

Table 3.4 Decision on the indicator for share of electricity – generation or installed capacity

Table 3.5 Decision on the indicator for the share of renewables in end-use targets

Table 3.6 Decision on the indicator for power targets - Capacity based vs. output based

Table 3.7 Decision on the indicator for green gas targets – output or capacity/unit based

Table 3.8 Decision on technology specificity of targets

Table 3.9 Indicators for achieving China’s 14th FYP

Table 3.10 Decision on long-term and short-term targets

Table 3.11 Examples of data collection objectives and data needs

BOXES

Box 1.1 Net zero targets announced by companies as of August 2022

Box 1.2 Six-month progress update on South Africa’s Just Transition Partnership

Box 2.1 The main functions of renewable energy targets

Box 2.2 Ecuador’s targets and policy measures to transition to electric cooking

Box 2.3 IRENA’s Beyond Food initiative: Clean cooking and climate action through electrification

Box 2.4 Renewable energy targets at the company level – the RE100

Box 2.5 The US government’s socio-economic aims for the deployment of renewables

Box 2.6 Methodology for quantifying renewable power targets and assumptions for major renewable energy players

Box 3.1 I ncrease in ambition of renewable energy targets in the European Union REPowerEU

Box 3.2 Potential socio-economic impacts of the energy transition in Africa with a comprehensive policy framework

Box 3.3 IRENA’s work on resource assessment

Box 3.4 The European Union 2020 renewable energy targets

Box 3.5 The United Kingdom’s Net Zero Strategy

Box 3.6 China’s 14th Five-Year Plan

Box 3.7 Compliance with renewable energy targets and renewable portfolio standards in the European Union, the United States and the Philippines

ABBREVIATIONS

CSP concentrated solar power

ETS emissions trading system

EV electric vehicle

FCV fuel cell vehicle

FIT feed-in tariff

GIS geographic information system

GDP gross domestic product

GHG greenhouse gas

JETS Just Energy Transition Partnership

LCOE levelised cost of electricity

LDC least developed countries

LPG liquefied petroleum gas

MENA Middle East and North Africa

NDC Nationally Determined Contribution

PV photovoltaic

RPS renewable portfolio standards

SDG Sustainable Development Goal

SIDS small island developing states

SWH solar water heater

TFEC total final energy consumption

TPES total primary energy supply

WETO World energy transitions outlook

UNITS OF MEASURE

Gt gigatonne

GW gigawatt

GWh gigawatt hour

kg kilogram

kt kilotonne

kW kilowatt

kWh kilowatt hour

Mtce million tonnes of coal equivalent

MW megawatt

MWh megawatt hour

TW terawatt

SUMMARY FOR POLICY MAKERS

GLOBAL DEVELOPMENTS CONTINUE TO SIGNAL WHY URGENT CHANGE IS NEEDED

The summer of 2022 has given the world a glimpse of a future in which the fight against climate change has been lost.

Temperatures are on the rise. July 2022 was the 46th consecutive July and the 451st consecutive month with temperatures exceeding the average for the 20th century (National Centers for Environmental Information, 2022). Heatwaves caused wildfires of unprecedented severity in Europe and the United States. Drought frequency and duration have increased by nearly a third since 2000 and water restrictions have been imposed in numerous jurisdictions, including in France, the United States and southwest China. Climate change is negatively affecting harvests and pushing up food prices globally, leaving 18 million people in Africa facing the risk of severe hunger (World Economic Forum, 2022). In Pakistan, which contributes less than 1% of annual global greenhouse gas (GHG) emissions, major climate-induced flooding left almost one-third of the country submerged, washing away half the country’s crops and causing significant food shortages (BBC News, 2022).

Multiple crises and the conflict in Ukraine reveal the fragility of a fossil fuel-based energy system.

Food prices were already high globally, as the world grapples with record-high inflation and energy prices, partly due to the conflict in Ukraine. In the European Union, electricity prices rose to historic levels in 2022.

Meanwhile, some 2.4 billion people still relied on traditional biomass for cooking in 2020 and 733 million people remained without access to electricity. In many countries, where there is access to electricity it is unreliable, slowing down socio-economic development.

At the same time, supply chain disruptions, permitting and licensing issues, along with other political and regulatory barriers are impeding the development of urgently needed renewable energy projects. The focus of renewable energy policy on cost-competitiveness has led to the concentration of supply chains in a small number of countries. Trade issues and COVID-related lockdowns have disrupted the supply of key components and equipment from those countries to the rest of the world, demonstrating the vulnerability of this model and the value of localisation.

These developments show the need for immediate action to increase ambition for renewable energy deployment, for climate goals, energy security and affordability, and to ensure universal basic rights such as access to energy, food and water. Recent developments also show that greater ambition is needed for the development of local supply chains that can contribute to energy security.

This report sets out to support governments in designing renewable energy targets that can help achieve the pressing objectives of reducing GHG emissions from burning fossil fuels, increasing resilience to climate impacts, limiting the dependence on energy imports, and achieving universal access to clean, affordable and reliable energy. While the report focuses mainly on national-level renewable energy targets, the lessons and insights apply to targets adopted by other levels of government.

CLIMATE PLEDGES MADE TO DATE SHOULD BE SIGNIFICANTLY ENHANCED TO UNLOCK THE FULL POTENTIAL OF RENEWABLE ENERGY, WHICH REMAINS LARGELY UNTAPPED

Almost all countries have signed the Paris Agreement and submitted Nationally Determined Contributions (NDCs), but the collective level of ambition of the commitments made to date is still not enough to limit global temperature rise to 1.5°C.

Since the signing of the Paris Agreement, 194 Parties have submitted NDCs. Since COP26 in November 2021, 24 countries had updated their NDCs (up to 16 October 2022), 8 out of which have updated their NDCs following the Glasgow Climate Pact that requested Parties to revisit and strengthen the 2030 targets in their NDCs by the end of 2022.

Renewable energy is one of the key components of the energy transition, but not all countries have included targets for their deployment in their NDCs. As of 16 October 2022, 183 Parties had included renewable energy components in their NDCs, of which only 143 had a quantified target. Of these targets, 108 focus on power and only 31 have targets for heating and cooling, transport or cooking. Only 12 Parties had committed to a percentage of renewables in their overall energy mixes.

Of the 108 Parties that had defined targets for renewables in the power sector in their NDCs, 47 presented them only in the form of additions – mostly in the form of capacity (GW) and a few in terms of output (GWh). Of the 61 Parties with targets defined as a share of the power mix, 13 commit to achieving a renewable energy share lower than 24%, 23 commit to a share between 25% and 59%, 13 commit to shares between 60% and 89%, and 12 committed to shares between 90% to 100% (see Figure S1). The design elements of renewable energy targets are detailed further in Chapter 3 of this report.

Commitments are being made outside the NDC process and beyond the 2030 time horizon. As of October 2022, 137 countries, 116 regions and 237 cities had made net zero commitments for 2050 as reported by the Net Zero Tracker. Private companies have also made such pledges. Almost 700 out of the 2 000 largest publicly traded companies globally have or are considering a net zero target. Together these 700 companies represent more than half of their cohort’s total annual revenue in 2020 (Net Zero Tracker, 2022). However, many of them have not backed up these targets with operational plans and strategies, leaving open the question of whether they would be realised (Energy Tracker Asia, 2022a).

For renewable energy targets in NDCs to become reality, they need to be aligned with renewable energy targets set in national energy plans and laws.

As of mid-October 2022, 82 countries had set renewable targets in the power sector in both national policies and NDCs, while 67 had set them only in national plans and 26 only in NDCs, and 21 countries party to the Paris Agreement had not made any specific commitments (Figure S2). In most countries, renewable energy targets in NDC pledges do not align with those included in national energy plans.

Aligning renewable energy targets in NDCs and national energy plans would increase the effectiveness and credibility of both, and reinforce clear signals to investors, developers and other players across the supply chain, thus enabling further development of the renewable energy sector.

In some cases, this will involve establishing or updating national targets. In other cases, it will mean including existing national targets in the next round of NDCs.

For renewable energy targets to be useful, they need to be ambitious enough to guide deployment on a path that exceeds historical trends and current deployment levels.

In IRENA’s 1.5°C Scenario, half of the total energy consumed comes from electricity by 2050, 90% of which is renewables based. As such, targets in the power sector, along with electrification targets for end uses, play a major role in decarbonising the energy sector. In order to keep the world on track to achieving the energy transition as per IRENA’s 1.5°C Scenario by 2050, the level of ambition of renewable energy power targets set in national plans and strategies for 2030 needs to at least double. In fact, non-ambitious targets may effectively act as a cap on renewables, hindering rather than promoting their deployment.

IRENA’s quantification of renewable energy targets in the power sector globally finds that existing targets aim to increase the total renewable capacity stock to 5.4 terawatts (TW) by the end of this decade, which is half of the 10.8 TW needed according to IRENA’s 1.5°C Scenario (Figure S3).

This is readily achievable, as the current targets are below the market pace and lag recent deployment levels. To meet the targets set for 2030, totalling 5.4 TW, countries would be aiming for an additional 2.3 TW by 2030, equivalent to average yearly additions of 259 gigawatts (GW) in the next nine years. This is below the capacity installed in the past two years. In 2020 and 2021, despite the complications that resulted from the pandemic and consequent supply chain disruptions, the world installed almost 261 GW each year.

Globally, the renewable electricity capacity targeted for 2030 remains concentrated in a few regions and technologies.

IRENA’s quantification of renewable energy targets in the power sector shows that Asia (including China and India), with aggregated targets totalling 2.6 TW in 2030 (from 1.5 TW installed in 2021) makes up around half of the global targeted capacity. Europe and North America and Oceania have targets to increase their renewable electricity capacity by almost 80% compared to 2021 levels, totalling 1 261 GW and 908 GW by 2030 respectively (Figure S4).

The Middle East and North Africa (MENA) account for just 3% of global deployment targets for 2030 (or 185 GW, up from 37 GW in 2021), despite the region’s high potential and the unsatisfied need for reliable and secure energy in many countries. Sub-Saharan Africa accounts for just 2.6% of global targets for 2030, aiming for capacity of 140 GW by 2030 (up from around 43 GW in 2021). Sustainable renewable energy is integral to Africa’s future, which currently hosts 77% of the world’s population without electricity access.

The countries targeting the highest level of deployment are all part of the G20, making up almost 90% of the global aggregate targeted capacity. Although least developed countries (LDCs) and small island developing states (SIDS) make up a small share of past renewable deployment, their aggregate targeted capacity totals 86 GW and 13 GW respectively, both doubling their current renewable capacity.

Countries’ renewable power targets mostly entail installing solar PV, onshore wind and offshore wind by 2030. Large shares of solar PV, onshore wind and offshore wind are expected, given the dramatic drop in the cost of these technologies – an 88%, 68% and 60% drop in their levelised cost of electricity (LCOE), respectively, between 2010 and 2021.

Targets need to be set and ambition needs to increase in end uses – heating and cooling, cooking, and transport – in both NDCs and national energy plans.

Stronger commitments are needed to drive the energy transition in end uses including harder-to-abate sectors (e.g. heavy industry). Heating and cooling, and transport account for about 80% of global energy demand, yet only 31 countries have set renewable energy targets for these end uses in their NDCs.

When it comes to national energy plans, only 40 countries had renewable heating and cooling targets by mid-2022, most of which are in Europe. Of these, 30 countries had set their targets as a percentage of all energy needed for heating and cooling without specifying the technology and 10 had set targets for specific technologies. A handful of countries in sub-Saharan Africa have set targets for specific technologies (e.g. solar water heaters), including Kenya, Niger and Zimbabwe.

For the use of renewables in transport, only 33 countries have renewable energy targets in their national energy plans, focusing on biofuels. For example, in the European Union, countries should reach at least a 3.5% share of advanced biofuels in their overall 14% target for transport by 2030. Globally, policy support has focused on road transport, mainly in the form of mandates and incentives to support the production and use of biofuels. Countries such as India, Indonesia and Zimbabwe have set biofuel targets that aim to gradually increase the renewable share of transport fuels. Policy support for renewable energy use in aviation and shipping remains modest.

TARGETS NEED TO BE DESIGNED TO SERVE COUNTRY OBJECTIVES, AND THEIR DESIGN SHOULD CONSIDER THE SPECIFIC CONTEXT

The main function of targets is to signal the country’s long-term political commitment to renewable energy, which is required to attract the investment needed to develop the sector. The more detailed, specific and credible the target is, the more likely it is to drive deployment, including through increased market confidence. This can ultimately translate into lower costs of capital and hence more project development.

The main objectives behind the drive for renewable energy deployment in the country need to be put at centre stage of target setting. These may include GHG emission and pollution reduction, energy access, energy security, reliability and affordability, industry policies and socio-economic development goals.

Target design should also consider the specific context of the respective jurisdiction. The factors to consider while designing targets include resource availability and the technical potential of various technologies to select the most suitable energy mix; future energy needs across all end uses (considering energy efficiency targets) to avoid shortages or at the same time ensure resources are not wasted on overcapacity; the level of development of the renewable energy sector and existing infrastructure to make sure the targets are achievable within the set timeframe.

While designing targets, decisions need to be made regarding their statistical basis, scope and coverage in terms of sectors and end uses, indicators, technology specificity and modalities for implementation (Figure S5). These key design elements for targets are explained below and are discussed in further detail in Chapter 3.

• The statistical basis relates to whether targets are determined as a share of a mix relative to a baseline (e.g. share of energy supply, electricity generation mix, percentage of vehicles) or a fixed absolute amount (e.g. capacity added, number of solar water heaters installed). Although targets expressed as a share of the mix may provide more clarity on the level of ambition on climate goals, as they imply phasing out (or opting out) fossil fuel-based energy and systems, they can be difficult to implement and monitor. Absolute amount targets can provide clearer commitment from policy makers and more certainty for market participants and investors as they stipulate a specific quantity that must be installed or produced by a specified time. Section 3.2 provides further details.

• The scope and coverage relate to whether the target covers the entire energy sector or specific end uses such as heating and cooling, transport and cooking. While the former provides a comprehensive view of the impact of the target with regard to climate goals and energy security, the latter may provide a clearer signal for the development of local supply chains for specific technologies. Many countries have used a combination of both. Section 3.3 provides further details.

• Targets can be set based on a range of indicators that vary in terms of scope and coverage. For percentage-based targets covering the whole energy sector, a decision is needed on whether they apply to total final energy consumption (TFEC) or total primary energy supply (TPES). For percentage-based targets in the power sector, a decision is needed on whether they represent a share of the generation or installed capacity. In end uses, a decision is needed on whether they represent a share of the total number of systems added by/after a given year (e.g. bans on combustion engine vehicle sales in the European Union and the state of California by 2035 correspond to a target of 100% of vehicles added after 2035 to be EVs) or a share of the total in use by a given year (e.g. Paris’s ban on all combustion engine vehicles by 2030 corresponds to 100% of vehicles on the street to be electric). For amount-based targets covering the power sector, a decision is needed on whether they are capacity-based (e.g. GW of installed capacity) or output-based (e.g. GWh of electricity produced). For end use sectors, a decision is needed on whether they represent a number of systems (e.g. solar water heaters) or output (e.g. tonnes of green hydrogen produced). These design elements are discussed in Sections 3.4 and 3.5.

• Technology specificity relates to whether the target should be technology-neutral or technology-specific. While technology-neutral targets can be strategic in the early stages of renewable energy development, as they allow markets to identify the most cost-effective technologies, technology-specific targets can enable further diversification of the energy mix, with benefits such as resilient systems and fewer integration issues. They can also enable the development of local value chains for selected technologies. Section 3.6 provides further details.

• Modalities for target implementation relate to whether the target is mandatory or aspirational, short to medium term or long term, and determine the process for its review and revision. Section 3.7 provides further details.

Aspirational targets are often common in markets and jurisdictions in the early stages of renewable energy development. As experience and know-how on technology costs, performance and other technology dynamics improve, and capacities of institutions covering energy data and policies develop, aspirational targets should be updated and become more binding. However, mandatory or binding targets require specific compliance and enforcement mechanisms (e.g. fines or penalties if the target is not achieved) and the designation of an entity that is responsible for achieving them.

Long-term targets provide a key signal to project developers, investors, service providers and manufacturers about the overall direction and long-term opportunities in a particular market, while short- to medium-term targets can introduce a sense of urgency and motivate stakeholders to act. Ideally, a balanced approach should be taken where long-term targets are translated into a series of short- to medium-term targets.

In addition, linking renewable energy targets to regular monitoring of market conditions is a key design element that allows for timely adaptation to changes in policy objectives and priorities, market dynamics, renewable energy costs and learning curves. Periodic revisions are also important as data collection and energy balances improve. In many cases, monitoring and adjustment can allow for an increase in ambition.

INTRODUCTION

The summer of 2022 has given the world a glimpse of a future in which the fight against climate change has been lost.

Temperatures are on the rise. July 2022 was the 46th consecutive July and the 451st consecutive month with temperatures exceeding the average for the 20th century (National Centers for Environmental Information, 2022). Heatwaves caused wildfires of unprecedented severity in France, Greece, Spain, Portugal and the United States. Drought frequency and duration has increased by nearly a third since 2000. In the summer of 2022 almost half of US states experienced droughts, the Horn of Africa experienced its worst drought in more than 40 years, Italy and France faced their worst drought since the 1950s and water restrictions were implemented in numerous jurisdictions. Climate change is negatively affecting food harvests and pushing up prices globally, leaving 18 million people facing the risk of severe hunger in the Ethiopia, Somalia and parts of Kenya (World Economic Forum, 2022). Pakistan, which contributes less than 1% of annual global greenhouse gas (GHG) emissions, suffered one of its most severe heatwaves in March, after which the country experienced 190% more rain compared to its 30-year average from June to August, causing major flooding in almost one-third of the country, washing away half the country’s crops and causing significant food shortages (BBC News, 2022).

Food prices were already high globally, as the world grapples with record-high inflation and energy prices, partly due to the conflict in Ukraine. In the European Union electricity prices rose to historical levels. Significant year-on-year increases in electricity wholesale prices were registered in EU countries in the first quarter of 2022, in Spain and Portugal (411%), Greece (343%), France (336%) and Italy (318%) (European Commission, 2022a) and in Germany prices reached almost six times the level of the same time the year before (Bloomberg.com, 2022).

Meanwhile, 733 million people remain without access to electricity and some 2.4 billion people still rely on traditional biomass for cooking (IRENA et al., 2022a). In many countries where there is access, electricity is unreliable, slowing down socio-economic development.

At the same time, renewable energy projects that are urgently needed to help address the energy crisis are facing hurdles such as increasing costs, supply chain disruptions, permitting and licensing issues, and other political and regulatory barriers. The cost of shipping renewable energy equipment and the price of many of the raw materials used for their production have been rising since the start of 2021. By March 2022 the price of aluminium had doubled, copper had risen by 70%, steel had increased by 50% and freight costs had risen almost fivefold (IEA, 2022). The price of polysilicon reached USD 40/kilogram (kg) in the first quarter of 2022, up from USD 6.80/kg in 2020 (Fitch Solutions, 2022). As such, the installation costs of wind and solar have increased, reversing the long-term trend of decreasing costs seen in recent decades. The focus of renewable energy policy on cost-competitiveness has led to the concentration of supply chains in a number of countries. Trade issues and COVID-related lockdowns have disrupted the supply of key components and equipment from those countries to the rest of the world, demonstrating the vulnerability of this model and the value of localisation.

These developments show the need for immediate action to increase ambition for renewable energy deployment, for climate goals, energy security and affordability, and to ensure universal basic rights such as access to energy, food and water. Recent developments also show that greater ambition is also needed for the development of local supply chains that can contribute to energy security.

This report sets out to support governments in designing renewable energy targets that can help achieve the pressing objectives of reducing GHG emissions from burning fossil fuels, increasing resilience to climate impacts, limiting the dependence on energy imports, and achieving universal access to clean, affordable and reliable energy. While the report focuses mainly on national-level renewable energy targets, the lessons and insights apply to targets adopted by other levels of government.

The first chapter presents an overview of the latest updates in climate commitments made ahead of the 27th Conference of Parties to the United Nations Framework Convention on Climate Change (UNFCCC) – COP27. It focuses on the Nationally Determined Contributions (NDCs) under the Paris Agreement, updated ahead of COP27, which outline each signatory’s commitments to mitigation and adaptation, indicating the pathway that the world will follow as it undertakes enhanced climate action and net zero emissions.

For renewable energy targets set within NDCs to materialise, they need to be reflected in national energy plans. But, to date, there is a mismatch between the renewable energy component in NDCs and the renewable energy targets set at the national level. Chapter 2 shows this mismatch, after presenting the latest trends in targets and an analysis of the level of ambition in renewable power targets globally by quantifying them.

Chapter 3 draws on IRENA’s Renewable Energy Target Setting report and presents the design elements of targets to achieve policy objectives related to the climate and beyond, within the specific contexts of resource availability, the level of development of the renewable energy sector, and the future energy mix.

Finally, recommendations for the way forward in target setting and monitoring are provided in Chapter 4.

1

1 NDCS AND OTHER COMMITMENTS TOWARDS CLIMATE OBJECTIVES

By COP26 in 2021, updated NDCs and other commitments, such as net zero targets, were predicted to be able to reduce emissions by 20% by 2030 compared to business as usual (i.e. prior to the submission of the first round of NDCs following the Paris Agreement), with the potential to limit warming to 2.1°C (UNEP, 2021).

In addition, COP26 witnessed a number of significant announcements, including a pledge by over 100 countries to cut their methane emissions by 30% by 2030. The International Energy Agency (IEA) finds that these commitments, along with the NDCs and net zero targets, would be adequate to limit the increase in global temperatures to 1.8°C by the end of the century, if achieved (IEA, 2021). In addition, a number of countries made pledges on coal phase-out and phase-down and ending coal and gas exploitation, while over 130 countries agreed to halt and reverse deforestation. Globally, these pledges represent crucial steps in the right direction, but they are not enough to meet the 1.5°C target.

Figure 1.1 shows two trajectories for (estimated) future global CO₂ emissions based on COP26 announcements (the orange line) and IRENA’s World Energy Transitions Outlook (WETO) 1.5°C Scenario, which outlines a pathway for limiting global temperature rise to 1.5°C and bring CO₂ emissions to net zero by 2050 (the blue line). The area between the two lines represents the gap between a 1.5°C scenario and the pledges made at COP26. In 2030, under the COP26 announcement scenario, global CO₂ emissions are estimated to reach 37.5 gigatonnes (Gt), but to reach the 1.5°C target, emission levels would need to be further reduced to 22.2 Gt in that year.

1.1 MOMENTUM FOR GLOBAL CLIMATE ACTION AND UPDATES ON NDCS SINCE COP26

The “Glasgow Climate Pact”, one of the major outcomes of COP26, called on Parties to review and strengthen their NDCs by the end of 2022, in order to limit the global temperature increase to below 1.5°C. Against this backdrop and building on the most recent announcements made since COP26, this section provides an overview of the latest NDC commitments and some of the main agreements made ahead of COP27.

Since COP26 in November 2021, 24 Parties had updated their NDCs (up to 16 October 2022). This includes six Parties from the G20: Australia, the Federative Republic of Brazil (Brazil), India, Indonesia, Republic of Korea, and the United Kingdom. Almost all of these Parties had in fact submitted updated NDCs in 2020-2021 ahead of COP 26,¹ but shared further updated NDCs to either communicate enhanced targets or further expand on means of implementation. Only three of these Parties have specific renewable energy targets, although some Parties made other commitments to clean energy; for example Australia has committed to invest around USD 20 billion in its grid infrastructure to unlock higher penetration of renewables, in addition to investments in manufacturing and deployment of renewables.

By 16 October 2022, 193 Parties had ratified the Paris Agreement and 194 had submitted NDCs.² Of the 166 Parties that submitted new or updated NDCs, only 99 Parties representing 81% of global GHG emissions submitted enhanced ambitions.³ Of the remaining Parties that submitted new or updated NDCs in 2022, 67 Parties (accounting for a further 14% of global emissions in 2019) submitted NDCs with either the same emission reduction targets, increased emissions compared to their first NDCs, or emission reduction targets that are not comparable with their initial NDCs (Climate Watch, 2022). These are shown in Figure 1.2.

Renewable energy plays a key role in IRENA’s 1.5°C Scenario, with its share of the world’s total final energy consumption (TFEC) needing to grow from 19% in 2019 to 38% in 2030 (IRENA, 2022a). Yet the renewable energy targets in NDCs are nowhere near that. As of 16 October 2022, 183 Parties had included renewable energy components in their NDCs, of which only 143 had a quantified target. Of these targets, 108 focus on power and only 31 explicitly mention heating and cooling, transport, or cooking. Only 12 Parties had committed to a percentage of renewables in their overall energy mixes. They include the Bahamas, China, Eswatini, the European Union, Ghana, Indonesia, Jamaica, the Maldives, Mauritius, Nepal, Pakistan and Paraguay.

Of the 108 Parties that had defined targets for renewables in the power sector in their NDCs, 47 presented them in the form of additions – mostly in the form of capacity (GW) and a few in terms of output (GWh). Commitments to add renewable power (in terms of capacity or output) deliver many benefits – namely providing long-term clarity on the trajectory of the renewable energy sector, increasing investor confidence, and building a local industry with its associated socio-economic benefits. However, a target in this form does not give a clear indication of progress towards achieving climate goals. By comparison, targets defined as a share of the electricity mix provide more clarity on the ambition with regard to climate goals, as they take account of phasing out or choosing to opt out of fossil-based power (see Section 3.2). Naturally, this only applies where the target covers a considerable share of the total electricity mix. Of the 61 Parties with targets defined as a share of the power mix, only 12 commit to shares between 90% to 100%, and 13 commit to shares between 60% and 89%, 23 commit to a share between 25% and 59%, and 13 commit to achieving a renewable energy share lower than 24% (see Figure 1.3).⁴ The difference between percentage-based targets and amount-based targets and the way they serve different policy objectives are detailed further in Chapter 3 of this report.

1.2 NET ZERO TARGETS AND COMMITMENTS

Commitments are being made outside the NDC process and beyond the 2030 time horizon. Many jurisdictions at the national, subnational and city level, in addition to private corporations, have made net zero commitments, and renewable energy is poised to play a pivotal role in the achievement of these targets.

At the national level, the Net Zero Tracker⁵ reported that 137 countries had announced they were considering net zero targets (as of October 2022). Of these countries, seven declared that they have achieved their net zero target, 17 have translated net zero targets into law, 40 have stated net zero in policy documents, 16 have made a pledge or declaration to reach net zero, and 57 are having ongoing discussions on adopting net zero targets (Net Zero Tracker, 2022). Table 1.1 shows the jurisdictions with net zero pledges as of October 2022. They include pledges described as achieving net zero, carbon neutrality, climate neutrality and zero carbon.⁶

Such targets are also being adopted at a faster rate at the subnational and city level. Out of the 713 regions and 1 177 cities covered by the Net Zero Tracker, 116 regions and 237 cities had net zero targets. At the city level, six have passed net zero targets into law, while 107 have stated them in policy documents and 36 in proposed documents, while 88 have made some form of declaration or pledge (Net Zero Tracker, 2022).

Private companies have also made such pledges. Corporations can have a significant impact on the energy transition, especially those involved in high-emitting activities and sectors such as industry and oil and gas. Almost 700 of the more than 2 000 companies covered in an analysis by Net Zero Tracker have announced net zero targets (Box 1.1). However, many of them have not backed up these targets with operational plans and strategies, leaving open the question whether these would be realised (Energy Tracker Asia, 2022a).

Box 1.1 Net zero targets announced by companies as of August 2022

According to the Net Zero Tracker, which tracks over 2 000 of the largest publicly traded companies in the world (representing USD 42 trillion in annual revenue in 2020), almost 700 companies (representing USD 21 trillion in annual revenue) have or are considering a net zero target.

While most targets are set for dates in the future up to 2050, about 31 companies claim to have already achieved net zero, of which three are externally validated while the rest have self-declared reaching net zero. The externally validated targets include Salesforce (an American cloud-based software company with around USD 17 billion in annual revenue), ITC (an Indian conglomerate with a diversified presence across industries such as hotels, software and agribusiness and annual revenue of around USD 5.5 billion) and the Goodman Group (an Australian commercial and industrial property group with annual revenue of around USD 1.1 billion). These companies are using carbon credit offsets, while Salesforce further claims to rely on CO₂ removal methods such as nature-based and carbon capture-based removal. The company has also declared that it is operating on 100% renewable energy as of 2021 (Salesforce, 2021).

About 430 companies have net zero targets as part of their corporate strategy. These include some of the highest grossing firms globally, which are also among the firms with highest GHG emission footprint, for example Walmart, Royal Dutch Shell, Aramco, Amazon, Toyota, BP and Exxon.

Company-based net zero targets have varying emissions coverage. More than 80% of the targets cover Scope 1 (direct emissions resulting from sources that are owned or controlled by the company) and Scope 2 emissions (emissions from generation of purchased electricity). However, many companies, especially the top 10 highest grossing companies, have targets that either do not cover, or only partially cover, Scope 3 emissions (i.e. indirect emissions as a consequence of the company’s activities, but which occur from sources not owned or controlled by the company).⁷

Finally, there are 205 companies that have made a net zero pledge, but have yet to outline their plans in their corporate strategy, while an additional 18 are still discussing the possibility of a net zero target. Figure 1.4 shows the status of companies’ net zero targets as of August 2022.

1.3 FOSSIL FUEL PHASE-OUT (PHASE-DOWN) TARGETS

Transitioning to a low-carbon future as laid out in IRENA’s 1.5°C Scenario requires not only scaling up renewables, but also phasing out (or phasing down) existing carbon-intensive generation, such as from coal, natural gas and oil. Fossil fuel phase-out (and phase-down) has gained further political traction in 2022, as countries seek to increase their energy security and reduce their dependence on imported oil and gas with the conflict in Ukraine.

Targets for coal phase-out have been adopted by several countries, mainly in Europe, with the addition of Canada and New Zealand. Table 1.2 presents all 22 economies that have adopted coal phase-out plans to date. However, these countries account for less than 4% of global electricity generation (Alvarez, 2021). Major existing and new coal players in the Asia Pacific region and in Africa are expected to drive future coal demand unless a broader coal phase-out is adopted.

Many of these commitments were made at COP26, when more than 40 countries (and around 150 organisations) signed a pledge to phase out (or phase down) coal (UNFCCC, 2021). The pact included 23 countries that pledged, for the first time, to cease building and issuing permits for new coal-fired plants domestically and to eventually transition away from coal. Five of the top 20 countries in the world that produce electricity using coal are among them: Poland, Indonesia, Korea, Viet Nam and Ukraine. However, these countries have yet to follow up their pledge with specific targets, timelines for phase-out or plans at the national level (Europe Beyond Coal, 2022).

Furthermore, European countries including Austria, Germany, Greece, Poland and the Netherlands are among the first to revert back to coal in a bid to secure energy supplies as gas imports from the Russian Federation have declined amid the sanctions introduced in 2022 (Daily News Egypt, 2022).

At COP26, South Africa’s Just Energy Transition Partnership (JETP) was launched, a joint initiative supported by the European Union, France, Germany, the United Kingdom and the United States. It aims to help decarbonise South Africa’s energy sector, which is currently dependent on coal for more than 70% of its electricity needs. The partnership is founded on the recognition that a transition away from coal must be carried out in a just and equitable manner, to prevent and manage certain transition risks such as the displacement of jobs or other impacts on livelihoods. Six months on from its launch, the JETP is now developing an investment plan to support the just transition objectives (Box 1.2).

Box 1.2 Six-month progress update on South Africa’s Just Transition Partnership

South Africa’s Just Energy Transition Partnership (JETP) was launched at COP26 to support the decarbonisation of the country’s energy sector, thereby helping meet its NDC target of keeping annual GHG emissions in the range of 350-420 million tonnes of CO₂-eq by 2030. Supported by the European Union, France, Germany, the United Kingdom and the United States, USD 8.5 billion were committed to be mobilised in the first round of financing. This deal to finance a just transition is first of its kind and can be used as a model for climate action, encouraging further international co-operation through increased financial and technical assistance directed at developing countries.

Following the announcement, an Independent Partners Group, chaired by the United Kingdom, and a Presidential Climate Finance Task Team have been set up to oversee the JETP’s governance. The JETP secretariat has been further established to provide a technical and coordination function. Consultations with related government representatives and development finance institutions have been ongoing, with a view to informing the development of an investment plan and financing package, while embedding just transition elements into the programme.

Further discussions are ongoing to identify the financing instruments suited to South Africa’s climate goals and investment needs, while keeping in mind the current fiscal situation. A combination of concessional loans, grants and debt guarantees is likely, supported with technical assistance. The JETP workplan aims to finalise the investment plan by COP27. In addition, five working groups have been established to deliver the technical experience and expertise to develop the investment plan, covering distinct topics: finance, power, hydrogen, transport, and implementation.

Building on the efforts of South Africa’s JETP, as announced in the G7 Chair’s Summary on Climate Neutrality, further JETPs are being developed in other countries, including India, Indonesia, Senegal and Viet Nam.

Sources: COP26 (2022); G7 (2022).

Although the United States – in addition to Australia, China and India – did not take part in the coal phase-out pledge at COP26, the country took part in a ministerial-level joint communiqué in May 2022, whereby G7 countries committed to make progress towards phasing out unabated coal power but did not specify a date yet for doing so. The countries also committed to decarbonising their electricity sectors by 2035, shifting road vehicle sales to zero-emission vehicles, and halting public financing for overseas fossil fuel projects by 2030. The communiqué was released against the backdrop of the conflict in Ukraine, which has reignited efforts – in Europe, in particular – to urgently switch to more sustainable energy sources (Carbon Brief, 2022).

Other related commitments made include targets for the phase-out of internal combustion engine vehicles. These are discussed together with targets for electric vehicles (EVs) in Section 2.1.1.

2

2 RENEWABLE ENERGY TARGETS IN NATIONAL PLANS

By the middle of 2022, 176 countries had in place some sort of renewable energy target at the national and/or subnational (e.g. state or city level).⁸ Of these, 12 had targets that expired in 2020 (IRENA, 2022b); these are included in the analysis, as they still contribute to achieving the energy transition. This is a significant increase from just 43 countries in 2005 (IRENA, 2015). Renewable energy targets have become increasingly diverse as policy makers have set out to adapt them to the unique circumstances of their jurisdictions and encourage investment in specific sectors or technologies.

Targets perform a range of functions in policymaking and can be grouped into three main stages, formulation, implementation and evaluation, as illustrated in Figure 2.1 (Box 2.1).

Box 2.1 The main functions of renewable energy targets

At the policy formulation stage, targets play an important knowledge and exploratory function. They can enhance the transparency of the policymaking process and help develop a knowledge base. Target formulation can also include intense political discourse and engagement. By fostering a sense of co-ownership, stakeholder participation can increase robustness and efficacy.

At the policy implementation stage, targets can indicate political commitment, signal a long-term trajectory for policy direction and investment, support planning and encourage stakeholders to take action. They can further improve alignment and coordination of policies across different sectors and market segments. Targets with clearly assigned responsible entities can also help foster accountability.

At the evaluation stage, targets serve as a benchmark through which the effectiveness of various policies is measured. Monitoring and evaluation can expose deficiencies in operations and planning, while highlighting opportunities for correction and adaptation.

The first section of this chapter presents the trends in renewable energy targets as of mid-2022. It shows innovation in target design, and the increasing diversity in the way targets are framed to cover different end uses and multiple policy objectives. These aspects of renewable energy target design are covered in Chapter 3.

One trend that has sustained over the years is the prevalence of targets in the power sector. A quantification of these targets is presented in Section 2.2, to analyse the current level of ambition in comparison to where we need to be in order to limit the rise in the average global temperature to 1.5°C, as per IRENA’s analysis in the 2022 World Energy Transitions Outlook (WETO).

2.1 TRENDS IN RENEWABLE ENERGY TARGETS

Renewable energy targets remain focused mainly on the power sector. In IRENA’s 1.5°C Scenario, half of TFEC is in the form of electricity by 2050, 90% of which is renewables-based. By 2030 almost a third of TFEC is electricity, almost two-thirds renewables-based (Figure 2.2). As such, targets in the power sector, along with electrification targets for end uses, play a significant part in decarbonising the energy sector. Trends in the adoption of renewable power and electrification targets are discussed in Section 2.1.1. The section also discusses targets for peaking power, an emerging trend to support the integration of higher shares of variable renewable energy into the system. Targets for rural electrification using off-grid technologies are also discussed.

The decarbonisation of the power sector alone will not be sufficient to put the world on a climate-safe pathway: 20% of the emission reductions needed in the energy sector will have to come from the accelerated use of renewables in end uses such as heating and cooling, as well as transport (IRENA, 2022a). Section 2.1.2 gives an overview of targets for the direct use of renewables in end uses, focusing on targets for specific technologies and solutions, for example green hydrogen and clean cooking.

Another trend in renewable energy targets is their increased adoption at varying levels of governance, including the supranational level (such as the European Union), the state, city and even community level. This trend is explored in Section 2.1.3.

Finally, targets for socio-economic benefits from renewable energy deployment, including jobs and development of local industries, are highlighted in Section 2.1.4.

2.1.1 MOST COUNTRIES STILL FOCUS THEIR TARGETS ON THE POWER SECTOR

Targets for renewable power at the national and state level

By mid-2022, 149 countries had targets for renewable power. Of these, 125 countries have set targets as a share of the electricity mix: 15 countries (mostly SIDS) are aiming for 100% renewables, 13 (mostly in Europe and SIDS) are targeting shares above 80%. There are 35 countries aiming for a share of renewables in their electricity mix between 50% and 79%, which include 10 countries in Europe, seven countries in sub-Saharan Africa,⁹ six in SIDS¹⁰, six in Latin America,¹¹ three in MENA (Mauritania, Morocco and Saudi Arabia), and three in Asia (Kazakhstan, Philippines and Sri Lanka). Some countries’ targets are further complemented by state level targets. For example, United States’ federal level target is supplemented by various state-level targets such as California’s target for 60% of electricity to be from renewables by 2030.

Some countries have set targets in the form of installed capacity, either mentioning specific technologies or remaining technology-neutral. For example, Ethiopia set a target of 25 GW by 2030, of which 22 GW is to be hydropower, 2 GW wind and 1 GW geothermal. Other countries have set both. The People’s Democratic Republic of Algeria, for example, is targeting a 27% share for renewable electricity generation by 2030, translating into 22 GW of installed capacity. The attributes of each of these target design elements are discussed in Chapter 3.

Targets for the electrification of end uses

As the electrification of end uses gains importance in the energy transition, an increasing number of countries are setting targets for the deployment of heat pumps, EVs and charging stations. Coupled with targets for high shares of renewables in the electricity mix, electrification targets can play an essential role in the decarbonisation of heating and cooling and transport. Moreover, the electrification of end uses can enhance grid flexibility through demand response management.

For heating and cooling, the European Commission’s REPowerEU plan includes a target to double the rate of deployment of heat pumps (European Commission, 2022b). Before that, the United Kingdom adopted a target to install 600 000 heat pumps a year in homes and in public buildings by 2028 (Government of the United Kingdom, 2020a).

Electrification targets require comprehensive policymaking, as demonstrated in Ecuador. In 2019 the government launched a nationwide initiative to transition 3.5 million households away from liquefied petroleum gas (LPG) to induction electric stoves, to meet their cooking needs (Box 2.2)

In the transport sector, EV targets and internal combustion engine bans have proliferated in recent years, particularly in Europe and Asia. By the end of 2020 about 37 countries had an EV target and/or a target to ban internal combustion engine vehicles (15 of which were in Europe and 13 in Asia) (REN21, 2021a). In the last year, seven additional countries have enacted similar targets or bans (REN21, 2022). Germany has increased its previous target by committing to putting at least 15 million fully electric and hybrid vehicles on the road by 2030, and maintained a previous target of building 1 million charging stations (Energy Monitor, 2022). To date, these have been incentivised through a wide mix of fiscal measures in the form of grants, subsidies, tax incentives and other benefits. The United States is also set to enact a target that calls for all new vehicles sold in 2030 to be zero-emission vehicles, such as plug-in hybrid electric, battery electric or fuel cell electric vehicles (The White House, 2021). In 2019 the first internal combustion engine phase-out target in China was announced by the Hainan province, aiming to ban fossil fuel car sales by 2030 (Science X, 2019). Moreover, targets for the electrification of railways combined with renewable electricity have been set by railway operating companies in Europe and India (International Railway Journal, 2019).

However, realising the positive impact of electrification will need a simultaneous increase in renewable power generation. For example, the Russian Federation plans to ramp up its EV fleet by setting a target for the annual production of 220 000 EVs by 2030. As the renewable electricity generation target is set at only 2% by 2030, much of the EV fleet could be powered by fossil fuel-based electricity. To date, only nine countries that have an EV target have also set a 100% renewable power target (REN21, 2022).

Targets for peak power

Some countries have defined targets specifically for peak generation. Guinea-Bissau’s National Plan of Action for Renewable Energy, for instance, sets an ambition for renewable energy capacity to reach 72 MW by 2030, representing 52% of peak demand (in terms of MW) and 72% of total electricity demand (in terms of share of production) (ECREEE, 2017).

The use of renewables and battery storage for “peaking” power is starting to gain ground, as several jurisdictions, mainly in the United States, start to seek ways to reduce reliance on natural gas plants to meet peak electricity demand and ease the integration of variable renewable energy into the grid. In August 2020 Massachusetts became the first state to adopt a so-called “Clean Peak Standard”, which refers to an additional target to the state’s existing renewable portfolio standard (RPS) of 33% by 2025. The standard requires 1.5% of total peak electricity demand to be procured from eligible clean peak sources, including renewables, storage and demand response. The minimum requirement is scheduled to increase by 1.5 percentage points per year up to 16.5% by 2030 (Commonwealth of Massachusetts, 2022).

Targets for rural electrification with off-grid renewables

Rural electrification targets specifying off-grid renewables continue to be widespread, in a bid to close the access gap that still exists for 733 million people, of which 568 million reside in sub-Saharan Africa (IRENA et al., 2022). As of August 2022, renewable energy targets for rural electrification were implemented in almost 30 countries, mostly focusing on off-grid solar photovoltaic (PV). Nearly half of these countries are in West Africa, where all countries have set a target. In contrast, Central Africa has the fewest countries with renewables-based rural electrification plans (IRENA and AfDB, 2022).

2.1.2 AN INCREASING NUMBER OF COUNTRIES ARE IMPLEMENTING TARGETS FOR RENEWABLES IN END USES (TRANSPORT, CLEAN COOKING, HEATING AND COOLING)

Although heating and cooling account for about 50% of global total primary energy demand (IRENA, IEA and REN21, 2020), only 40 countries had renewable heating and cooling targets by mid-2022, most of which are in Europe.

Of those, 30 countries have set their targets as a percentage of all energy needed for heating and cooling without specifying the technology, and 10 have set targets for specific technologies. For example, India has a solar water heating (SWH) target of 14 GWth (20 million m² of solar receptors) by 2022. A handful of countries in sub-Saharan Africa have set similar targets, such as Kenya, Niger, Nigeria, Senegal and Zimbabwe.

Ecuador presents an interesting case that showcases the need for comprehensive policymaking to achieve targets (Box 2.2). In 2019 the government launched a nationwide initiative to transition 3.5 million households away from liquefied petroleum gas (LPG) to induction electric stoves, to meet their cooking needs.

For the use of renewables in transport, only 33 countries have targets. Policy support has focused on road transport, mainly in the form of mandates and incentives to promote the production and use of biofuels¹² (in addition to the deployment of EVs running on renewable electricity). Some of those targets increase gradually, such as in India (see Section 3.4.3). Another example is Zimbabwe, where the biofuel policy of 2020 sets out a target for ethanol blending of 20% by 2030 and biodiesel blending of 2% starting from 2020 when available (Government of Zimbabwe, 2020). Indonesia has a target for biodiesel blending and bioethanol of 30% and 20% respectively, by 2025 (USDA, 2018). There are plans to increase the biodiesel target to 40%, although these have not yet materialised into any legislation or policy (Christina, 2022).

The aviation and shipping sectors have received modest policy attention. The International Maritime Organization and the International Civil Aviation Organization are two international organisations that have adopted GHG emission reduction targets for international shipping and aviation in 2030, respectively (International Civil Aviation Organization, 2017; International Maritime Organization, n.d.). Some regional and national governments have set targets for sustainable aviation fuels. In its Fit for 55 packages, the European Union has proposed blending 5% sustainable aviation fuels (SAF) into general aviation fuel by 2030. Other countries, including Finland, Indonesia, the Kingdom of Sweden, the United Kingdom and the United States, have set specific targets for the aviation sector. For instance, Finland has set a target for a 30% biofuel share in aviation to support its goal of carbon neutrality by 2035 (Biofuels International, 2019).

Targets for clean cooking

According to the latest SDG7 Tracking report, about 2.4 billion people were still without access to clean cooking in 2020, more than 80% of whom reside in one of the 20 countries with the lowest access to clean fuels. In seven of these countries, the Democratic Republic of the Congo, Ethiopia, Madagascar, Mozambique, Niger, Tanzania and Uganda, less than 5% of the population have access to clean fuels and technologies. Unless efforts are ramped up significantly, this access deficit will continue to grow as population growth outpaces the rate at which clean cooking access is provided (IRENA et al., 2022).

In a bid to achieve the Sustainable Development Goals by 2030, countries are increasingly adopting targets for clean cooking.¹³ These include targets for the adoption of efficient cookstoves and a transition to renewables-based clean cooking options, including the use of electricity and biogas.

Ghana, for example, has set a target of installing 3 million improved cookstoves by 2030, Kenya has framed its target as achieving a 57.7% rate of adoption of improved cookstoves among households by 2030 and Rwanda is aiming for 100% access to higher-efficiency cookstoves than currently used by 2030 (IRENA, 2022b). Rwanda is also aiming to almost halve the share of households using wood and other biomass fuels from 83% to 42% by 2024 (SEforAll, 2018).

IRENA, supported by the government of the United Arab Emirates under the Beyond Food initiative, is studying how countries that have clean cooking targets in their NDCs can meet them through electrification (Box 2.3).

Box 2.2 Ecuador’s targets and policy measures to transition to electric cooking

Ecuador’s plan to transition 3.5 million households relying on liquefied petroleum gas (LPG) for their cooking needs to induction electric stoves was part of the strategy to transition to electric cooking and water heating in a country where renewables, predominantly hydropower, account for more than 60% of the electricity mix (IRENA, 2022d).

The Energy Efficiency Programme provided a tariff subsidy to 13% of the population, consisting of a zero tariff rate for the consumption of electricity up to 80 kilowatt hours (kWh) per month for the purpose of using induction cookers, and up to 20 kWh for water heating systems. The scheme involves visits to verify the use of the induction cooker or the electrical water heater.

Despite the subsidised tariffs, electric cookers still met resistance from some consumers. In addition to cultural habits that may take some time to change, electric stoves require the use of induction appliances, which are more costly and limited in terms of size and application.

But more importantly, there is a misconception among consumers that the use of induction cookers increases electricity bills and that LPG remains more affordable. LPG is still subsidised and is sold at an official price of USD 1.6 for a 15 kg cylinder (enough for a month in a family of four members). The LPG state subsidy was not removed as was planned, and in 2021 it amounted to approximately USD 860 million, and this number is expected to increase in 2022 with the rise in global energy prices.

In addition, the eligibility of a household to receive the zero-rate subsidy for up to 80 kWh depends on showing an increase in power consumption following the installation of cookstoves, compared to the average consumption in the year before the installation. Other factors might contribute to evening out consumption (e.g. reduced consumption due to fewer people in the household or the retirement of other less efficient appliances). At the same time, some households might have increased consumption due to reasons other than the use of the cookstoves, but are still eligible for the subsidy even if they continue to use gas for cooking. This highlights the need for coordinated policy measures to support target achievement.

Source: 247newsagency.com (2022).

Box 2.3 IRENA’s Beyond Food initiative: Clean cooking and climate action through electrification

On 4 March 2022, at Expo 2020 Dubai, IRENA launched a new initiative, “Beyond Food: A partnership to empower people and communities through clean cooking and sustainable energy”, supported by the United Arab Emirates government, looking at the role of women, enterprises and clean cooking, as well as finance facilitation and climate action. Under the initiative, IRENA is assessing efforts towards achieving clean cooking commitments in Nationally Determined Contributions (NDCs) and national energy plans by IRENA member states that are also Parties to the Paris Agreement. The aim is to support them to meet their NDC commitments and achieve SDG7. IRENA is also developing a country engagement and finance facilitation strategy for the clean cooking energy transition based on electrification. The outcomes will be combined with and build on IRENA’s ongoing and potential climate action support to Paris Agreement Parties, enhancing and implementing their climate pledges through NDCs and long-term low-emission development strategies

Targets for green hydrogen

Green hydrogen¹⁴ plays a major role in decarbonising hard-to-electrify sectors, such as the production processes of basic chemicals and primary steel. Long-haul transport (shipping and aviation) can also benefit from hydrogen derivatives, namely ammonia and synthetic fuels. In IRENA’s 1.5°C Scenario, green hydrogen accounts for around 8% of total energy consumption (Figure 2.2). By October 2022 more than 60 countries had developed or were preparing hydrogen strategies, from just one country (Japan) in 2017 (Bianco et al., 2022). Countries with hydrogen strategies as of October 2022 are shown in Figure 2.3.

As part of their strategies, several countries have adopted targets for green hydrogen, most commonly framed in terms of electrolyser capacity (Section 3.5.2). The total installed capacity of electrolysers in these targets is around 100 GW by 2030 (Figure 2.4)

The EU REPowerEU package sets a target to domestically produce 10 million tonnes of renewable hydrogen, in addition to 10 million tonnes of imports by 2030, with a view to replacing natural gas, coal and oil in hard-to-abate industries and the transport sector. The increase in the production of green hydrogen translates into a need to increase the installed capacity of electrolysers to 65 GW in 2030 (current capacity is less than 1 GW) (European Commission, 2022b).

Other common targets included in strategies are for the share of green hydrogen in total hydrogen or gas demand. France, for example, has set a target specifying that 10% of the gas in the supply mix should be renewable by 2030. In Spain, the government developed a hydrogen strategy that sets a minimum 25% green hydrogen contribution to the total hydrogen consumed by all industries in 2030, both as an energy carrier and as a feedstock. Relative to current hydrogen consumption in Spain, this amounts to around 125000 tonnes per year (IRENA, 2022f) (IRENA, 2021).

Strategies can also set socio-economic targets. These include targets for increased revenues, investment and exports, positive impact on gross domestic product (GDP), and most commonly, job creation. Expectations for job creation in the hydrogen sector can be found in the strategies of Canada, the Republic of Colombia, France and Italy (IRENA, forthcoming).

2.1.3 TARGETS DETERMINED AT THE CITY LEVEL ARE BECOMING INCREASINGLY COMMON

As local leadership grows, local governments and cities are playing an increasingly vital role in speeding up the energy transition, as many have announced renewable energy targets (and net zero targets as mentioned in Section 1.1.2). At the end of 2021 about 925 cities in 73 countries had adopted renewable energy targets in the power and/or other end-use sectors (REN21, 2022).¹⁵

Consistent with global trends, most city-level renewable energy targets apply to the power sector, although cities are increasingly enacting targets for transport (mainly on electric mobility) and heating and cooling. By the end of 2020 about 617 cities had 100% renewable energy targets in place, mainly for the power sector, and at least 125 cities had already achieved their target of 100% renewable electricity. (REN21, 2021b).

Many jurisdictions are trying to accelerate the transition to cleaner modes of transport by combining their policies to encourage electric and other clean forms of transport. About 100 cities had e-mobility targets by the end of 2021 (REN21, 2022), while a growing interest in hydrogen for transport in cities in East Asia, Australia, California and Europe is resulting in targets for renewable hydrogen-powered transport. In addition, many cities have enacted policies to discontinue the sale of, or completely ban the entry of, internal combustion engines by a certain date. For example, Amsterdam has announced that petrol- and diesel-powered vehicles would be prohibited from entering the city by 2030, with a non-electric bus ban already in place in 2022 (REN21, 2021b).

City-level targets in the heating sector are also growing. By the end of 2021 some 170 renewable heating targets were active at the city level, mainly across Europe and the United States. In addition, bans on the use of natural gas, oil, or coal for space and water heating had been passed or proposed in more than 59 cities across 13 countries (REN21, 2022).

City-level targets are more prevalent in high-income countries. North America and Oceania (together) and Europe account for 80% of all city-level renewable energy targets, the first having 406 targets and the second having 374 targets. Asia (64), Latin America (48), sub-Saharan Africa (24) and MENA (9) make up the rest. Figure 2.5 presents an overview of city-level targets by region. Relatively smaller cities with populations under 500 000 make up almost three-quarters of the cities with renewable energy targets; examples include Bakata (Burkina Faso), Hanover (Germany), Takarazuka (Japan) and Santa Cruz (California), although large cities such as Beijing, Cape Town, Dubai and Frankfurt have also set renewable energy targets (REN21, 2022).

Private companies are increasingly adopting renewable energy targets, with many aiming for a 100% renewable energy share. Some of these have come together to form a global network, the RE100 (Box 2.4).

Box 2.4 Renewable energy targets at the company level – the RE100

The RE100 is a global network bringing together hundreds of businesses that have made a commitment to run on 100% renewable energy. As of August 2022, a total of 370 companies are part of the network and together they consumed 340 terawatt hours (TWh) of electricity in 2020 (more than United Kingdom), of which 45% was reported to be from renewable sources. The network is growing fast, with most new members coming from the Asia Pacific region, particularly Japan and the Republic of Korea.

The sectoral composition of companies with 100% renewable energy targets is skewed towards the service sector, although the representation of the manufacturing sector is growing fast. As Figure 2.6 shows, 140 companies from the service industry with an average 71% renewable electricity share have set such targets. They include multinational firms such as Accenture, Barclays and Deloitte. About 77 companies have set similar targets in the manufacturing sector, with a current average renewable energy share of 32%. They include companies such as Apple and General Motors.

The timelines for the targets differ between regions and sectors. Companies in Asia Pacific typically have targets for well beyond 2030 as it may be relatively more difficult to procure renewable electricity in the region. By sector, most firms in the manufacturing and materials sectors have set targets for 2030 and beyond. In contrast, companies in the service sector have mainly set targets for 2025 or earlier.

As the share of renewables is lower in the manufacturing sector to begin with, the longer timelines show the need for further research and development to deploy feasible and commercial solutions for their decarbonisation. Going 100% renewable can therefore pose more challenges in hard-to-decarbonise sectors. For example, the ALTANA Group produces chemical products and has 48 facilities and 65 research and service laboratories globally. Although the corporation has a 100% renewable energy target and has so far achieved 96% renewable power across its operations worldwide, the remaining 4% continues to come from gas-based plants and is only expected to be renewables-based by 2040.

2.1.4 COUNTRIES ARE INCREASINGLY SETTING TARGETS FOR SOCIO-ECONOMIC DEVELOPMENT FROM RENEWABLE ENERGY DEPLOYMENT

A global energy transition based on renewables under IRENA’s 1.5°C Scenario leads to an increase in world GDP that is 2.4% greater (on average) than that under the Planned Energy Scenario over the next decade. Economy-wide employment is 0.9% higher on average. In addition, IRENA’s Energy Transition Welfare Index, with its five dimensions – economic, social, environmental, distributional and energy access – shows that the 1.5°C pathway improves global welfare significantly (IRENA, 2022a). In Africa, the energy transition under IRENA’s 1.5°C Scenario predicts 6.4% higher GDP, 3.5% higher economy-wide jobs and a 25.4% higher welfare index than that realised under current plans, on average up to 2050 (IRENA and AfDB, 2022).

But these continent-level benefits mask large disparities between regions and countries, and they do not occur automatically. They need a comprehensive set of policies, including industrial and labour policies, and measures for education and training, and public financing, among others. This is why setting a target for the socio-economic benefits that the energy transition aims to achieve in a given country is very important. Such a target can provide a clear direction with regard to the policies that need to be implemented to ensure a just and inclusive energy transition. Morocco and South Africa were among the first countries to set such objectives at their early stages of renewable energy development, and pioneered policy measures and auction design to serve those objectives. Their cases are detailed in the IRENA report Renewable energy auctions: Status and trends beyond price (IRENA, 2019a).

More recently, policy makers in the United States have been working to provide workforce training and grow manufacturing. Goals have been set for at least 300 000 additional diverse solar employees and 1 GW per year of new US PV manufacturing capacity. The focus is also on removing barriers to equitable solar access and supporting a diverse and inclusive workforce. A goal has also been set for 100% of US energy consumers to be able to choose residential or community solar that does not increase their electricity cost (Moreno, n.d.). In 2021 President Biden set a GHG reduction target by 2030 that aims to create well-paid union jobs and secure US leadership on clean energy technologies (Box 2.5). The United Kingdom’s strategy to speed the transition to net zero, support green jobs and improve infrastructure is outlined in the Ten Point Plan for a Green Industrial Revolution. In order to create and sustain up to 250 000 green jobs, the government intends to mobilise GNP 12 billion in public investment and potentially up to three times that amount from the private sector. The government’s net zero strategy plans to support the transition with cross-cutting action. This includes reforming the skill development sector so that trainers, employers and students are motivated and prepared to contribute to the shift to net zero (Government of the United Kingdom, 2020b).

Targets are also being set to develop local supply chains, as the disruptions, increase in prices, trade conflicts and conflict in Ukraine have emphasised the importance of energy security and independence. One of the European Commission’s industry strategies, the European Solar Initiative, is targeting an annual production of 20 GW by 2025. Around EUR 8-10 billion would be needed, reflective of the EUR 8 billion trade deficit in solar equipment in the European Union. Incentives will be required to enable bigger market shares for EU-manufactured solar products. In addition, the bloc’s wider climate agenda to protect its manufacturing sector may be helpful, with potential carbon footprint restrictions for imported solar products. This has already succeeded in protecting local solar manufacturing in France and would help establish a level playing field with lower-cost imported products (Fitch Solutions, 2022).

Box 2.5 The US government’s socio-economic aims for the deployment of renewables

In the United States, policy makers are aiming to maximise the opportunities presented by a transition to clean energy, to support well-paid union jobs and working communities, advance environmental justice and protect public health.

To develop the goal, the administration analysed how every sector of the economy can spur innovation, unleash new opportunities and create benefits. The target builds on leadership from various stakeholders including businesses, investors, healthcare organisations and communities.

The US 2030 target to reduce emissions also aims to support the long-term goals of achieving a carbon-free electricity sector by 2035 and a net-zero economy by 2050, while achieving socioeconomic objectives that include:

• Job creation. Meeting the 2030 target of reduced emissions is intended to create millions of well-paid union jobs, for example in constructing transmission lines, in EV manufacturing and charging infrastructure installation, developing green hydrogen and carbon capture in cement and steel production, and in agricultural applications of carbon innovation.

• Local manufacturing. The objective is to strengthen domestic supply chains and position the United States as an exporter of clean energy products, such as EV batteries.

Source: The White House (2021).

2.2 QUANTIFICATION AND ANALYSIS OF RENEWABLE ENERGY TARGETS IN THE POWER SECTOR

Approximately 90% of global electricity needs have to be supplied by renewables by 2050 – up from around 26% in 2019 – to put the world on a climate-safe pathway (IRENA, 2022a). This section provides an in-depth analysis of targets adopted in the power sector to date, and how they fair in putting the world on the path to achieving climate goals.

2.2.1 RENEWABLE POWER TARGETS ARE HALFWAY MET GLOBALLY, BUT THEY ARE CONCENTRATED IN FEW REGIONS AND TECHNOLOGIES

To analyse the level of ambition in renewable power targets currently in place, IRENA has undertaken an exercise to quantify them (currently active and expired) by country, and then aggregate them by region and by technology. The quantification methodology is explained in Box 2.6.

Box 2.6 Methodology for quantifying renewable power targets and assumptions for major renewable energy players

IRENA’s quantification exercise aims to provide estimates of the total renewable capacity that would be installed should countries successfully meet their targets.

In cases where targets are expressed in terms of fixed capacity (e.g. Brazil and Viet Nam), figures are used as is. In cases where the target is expressed as a share of the power mix (e.g. Japan has a 2030 renewable energy generation target of 36-38%), the total electricity generation in the target year is obtained or derived from data provided in official documents. Where this is not possible, it is projected based on a 10-year historical cumulative annual growth rate (CAGR). The quantity of renewable energy generation in the target year is then obtained by multiplying the overall electricity generation by the target share.

Next, the technology-specific shares in the renewable electricity mix are calculated. When technology-specific targets are not available, the mix is estimated according to the share of each technology in capacity additions over the last five years (2017-2021 period). Finally, IRENA’s capacity factor data are used to convert generation (MWh) into capacity (MW).

Subnational targets are only taken into account for major renewable energy players (e.g. Australia and the United States) as in these cases respective sub-national governments have their own targets that are driving deployment, even when the federal target is relatively small.

Data are obtained from national statistics, policies and planning documents such as roadmaps and national electricity outlooks. Certain assumptions and approximations are made to account for the gaps and ambiguities in available data. These are made on a country-by-country basis to reflect local conditions where possible. Further details on the methodology are presented in Annex 1.

Aggregated quantified targets by region

The quantification exercise finds that the achievement of all renewable power targets set in national energy plans would result in 5.4 TW of renewable installed capacity by 2030.¹⁶ As shown in Figure 2.7, the majority is in Asia (particularly China and India), which has aggregated targets totalling 2.6 TW in 2030 (from an installed total of 1.5 TW in 2021). Europe and North America and Oceania together have targets to increase their renewable energy capacity by 78-80% compared to today’s levels, totalling to 1 261 GW and 908 GW by 2030 respectively.

MENA accounts for just 3% of global targets by 2030 (or 185 GW, up from installed capacity of 37 GW in 2021), despite the region’s high potential and unsatisfied need for reliable and secure energy in many countries.

Finally, sub-Saharan Africa accounts for just 2.6% of global targets by 2030, with a target capacity of 140 GW by 2030, up from around 43 GW already installed in 2021. Sustainable renewable energy is fundamental to Africa’s future, as it currently hosts 77% of the world’s population with no electricity access (IRENA et al., 2022). Countries in this region therefore have a strong imperative to harness their renewable energy potential, close the access deficit and boost the region’s welfare and economic development.

The countries targeting the highest level of deployment are all part of the G20, making up 89% of the global target. Finally, although LDCs and SIDS make up a small share of past renewable deployment, their aggregated targets total 86 GW and 13 GW respectively, both doubling their current renewable capacity stock.

Quantified targets by technology

Figure 2.8 shows the quantified targets by technology. The left pie chart shows the mix of different technologies should all countries reach their targets successfully, while the right-hand side shows the remaining targeted capacity over the 2022-2030 period, i.e. the difference between aggregate targeted capacity and current installed capacity.

As shown, the targets mostly aim to install solar PV, onshore wind and offshore wind by 2030 (right-hand side) corresponding to 2 187 GW, 1 352 GW and 213 GW respectively. The large shares of solar PV, onshore and offshore wind are expected, given the dramatic drop in the cost of these technologies – an 88%, 68% and 60% drop in the levelised cost of electricity (LCOE), respectively, between 2010 and 2021 (IRENA, 2022g).

Although the figure shows a relatively low percentage of offshore wind, many countries have recently committed to deploying volumes that were not necessarily included in those targets. For this exercise, even in the case where countries have implemented policy instruments aiming for a certain level of deployment, such as the announcement of an auction, the volume in question is not accounted for as it is not officially included as part of a target. But recently, a number of offshore wind targets have been announced, particularly in United States and in Europe, to help phase out fossil fuels and to reduce reliance on energy imports from the Russian Federation. The United States has set a federal target of 30 GW offshore wind by 2030, while Germany and the United Kingdom have recently raised their offshore wind targets to install 80 GW by 2030 collectively (from a combined 60 GW previously). In addition, in May 2022 at the Offshore Wind Summit, Belgium, Denmark, Germany and Netherlands made a joint pledge to increase the combined North Sea offshore wind capacity of the four countries to 150 GW by 2050 (Bulijan, 2022).¹⁷

Although relatively few countries have targets for additional hydropower capacity, many will continue to rely on hydropower as an important part of their electricity mix. This explains why it continues to make up a significant share of the aggregate target capacity by 2030.

Regional progress on aggregated quantified targets

Based on the global renewable energy capacity installed to date, the world has already achieved 57% of its targeted capacity for 2030. In fact, most regions are above the halfway mark to achieving their targets (Figure 2.9). Latin America and the Caribbean already have an achievement rate of 87%, driven by recent capacity additions in Brazil. Progress remains below the halfway mark in sub-Saharan Africa and MENA, which have an achievement rate of 30% and 20% respectively.

IRENA further analysed the achievement of targets that were expiring by 2020. That year, the world’s renewable energy capacity reached 2.8 TW. Almost all (88%) of the global target capacity for 2020 had been met. This was driven by a handful of countries such as China, the United States and major European economies, while most of the other countries had in fact missed their targets.

2.2.2 EXISTING RENEWABLE ELECTRICITY TARGETS CAN BE MET, BUT ARE NOT SUFFICIENTLY AMBITIOUS TO MEET CLIMATE GOALS

The world has made remarkable progress in deploying renewable energy capacity in the power sector, with global installed capacity growing from just above 750 GW in 2000 to over 3 TW in 2021 (IRENA, 2022h). A large part of the deployment to date can be attributed targets, together with policy instruments and financial incentives that, among other things, have contributed to the cost-competitiveness of renewable energy technologies. Figure 2.9 shows the cumulative renewable power installed capacity to date, together with future projections based on historical trends.

First of all, the graph shows that we are well on our way to achieving the targets set. But at the same time, it shows that the existing targets are not ambitious when compared to current deployment rates. For targets to be meaningful, they need to be more ambitious than the current trajectory.

To meet the targets set by 2030, totalling 5.4 TW, countries would be targeting an additional 2.3 TW by 2030, equivalent to average yearly additions of 259 GW over the next nine years. This is a slight increase compared to the average since the Paris Agreement in 2015 of 233 GW installed capacity a year, but below the annual installed capacity in the past two years. In 2020 and 2021, despite the complications that resulted from the pandemic and consequent supply chain disruptions, the world installed more than 260 GW each year.

More importantly, Figure 2.10 also shows that the set targets are nowhere near where they need to be to put the world on track to meeting the 1.5°C Scenario. The implementation of all targets would bring the total installed capacity to 5.4 TW globally, about half of the 10.8 TW needed by 2030 in IRENA’s 1.5°C Scenario. The average yearly additions of 259 GW targeted until 2030 are less than a third of the annual capacity of 860 GW that needs to be added to meet the 1.5°C Scenario.

Figure 2.11 shows the installed capacity by technology in 2021, the capacity reached if all targets are achieved by 2030, and what is needed to keep the world on track with the 1.5°C Scenario by 2030, by technology. Considerably higher targets would be needed for solar PV and onshore wind, which fall short of the needed capacity by 3 TW and 1.6 TW, respectively. CSP targets should be more than seven times higher, while those for geothermal need to almost quadruple, and offshore wind targets need to be nearly doubled.

Renewable energy targets need to be made more ambitious to account for all the deployment driven by parallel policy instruments (e.g. auctions) and the pledges made in net zero and fossil fuel phase-out and phase-down announcements, as well as NDCs.

2.2.3 RENEWABLE POWER TARGETS IN NATIONAL ENERGY PLANS DO NOT ALIGN WITH THOSE IN NDCS

Although most of the NDCs presented have higher ambitions for renewable energy (Section 1.1.1), NDCs are still non-binding pledges, even when they are unconditional.¹⁸ Therefore, translating pledges made in NDCs into action will depend in part on how well these commitments are integrated into more binding national policies and plans. This section focuses on the power sector and compares the renewable power targets in NDCs and those in national energy plans to identify the incidence of mismatch between the two, with deeper analysis of the SIDS.

Figure 2.12 shows that as of October 2022, 82 countries had set renewable power targets in both national policies and NDCs, while 67 had set them only in national plans, 26 only in NDCs, and 21 countries had made no commitments specific to renewable power. Sub-Saharan Africa has the highest number of countries with renewable energy targets only in their NDCs, many of which are LDCs. This highlights the importance of NDCs for those countries as a primary document for creating a national low-carbon strategy.

The comparison of renewable energy targets in national laws and official strategies released as of mid-2022 with renewable energy targets in NDCs as of October 2022 finds that in many cases, pledges made in NDCs have not been incorporated into long-term policy and planning. An earlier IRENA analysis (of NDCs submitted up to 2020) found that in 178 of the 194 countries that were analysed (92%), a mismatch was found between renewable energy targets in NDCs and those featuring in national laws and official strategies and plans.¹⁹ However, the latest NDC submissions are addressing this mismatch.

Although this may partly be due to temporal differences in the enactment of national legislation and NDCs,²⁰ translating pledges in NDCs into binding legislation can mainstream them into long-term policy and planning. This can help mobilise the required institutional, regulatory and financial infrastructure of countries in pursuit of a low-carbon development strategy.²¹

Renewable energy targets in NDCs and national policies for SIDS

IRENA has quantified the renewable capacity contributions mentioned by the SIDS in their NDCs and national policy documents. The analysis finds that out of the 40 SIDS that have submitted an NDC to date, 32 have a quantifiable renewable energy target. Almost all of the SIDS with targets in their NDCs have focused them on the power sector (30), while only two have set specific targets in end uses such as transport and heating and cooling, and three have set their targets as a percentage of the whole energy mix.

In the power sector, many SIDS have committed to 100% renewables in their electricity mix by or before 2030 in their NDCs. Although climate is a major driver for renewables deployment in these countries, increased ambition is also driven by energy security, and other socio-economic benefits, which are adversely affected by the high cost of importing fossil fuels. However, these targets remain conditional on international support in the form of financing, technology transfer and technical assistance.

IRENA’s quantification of targets shows that as per the NDCs, in the power sector the SIDS have committed to reaching 11.5 GW of installed renewable capacity by 2030, up from 5.2 GW in 2021. The unconditional targets total 5.5 GW, while the conditional targets are estimated to be equivalent to 6 GW. This means substantial international support is needed in the form of financial and technical assistance, capacity building and technology transfer to help SIDS achieve their renewable energy targets.

Based on all national targets as per national policy documents, laws, official strategies and plans, total renewable electricity capacity in SIDS would reach almost 13 GW by 2030, which is 1.5 GW higher than the target capacity in NDCs, including both conditional and unconditional targets. What this shows is that most of the targets set in NDCs remain aspirational and would only be reached with considerable support from the international community.

3

3 KEY CONSIDERATIONS FOR TARGET SETTING

The objectives for renewable energy deployment and development differ widely from one jurisdiction to another, and these differences should be kept at centre stage when designing targets. Equally important for target setting is the current context in which targets are being considered, vis-à-vis the existing energy mix and structural dependencies of the country, its future energy demand, existing infrastructure and its technical and economic potential. These considerations are discussed in Section 3.1.

Questions to be answered while setting targets include the following: what is the statistical basis for the target, is it set relative to a baseline or is it an absolute amount that would be added (Section 3.2)? What is the scope of the target in terms of sector coverage and end uses mentioned (Section 3.3), and what is the main indicator by which the baseline and the target are defined (Sections 3.4 and 3.5)? Will specific technology choices be pursued (Section 3.6)? What is the timeline and other modalities for implementation and how often are they reviewed (Section 3.7)?

A wide range of options should be examined, keeping in mind the overall policy objectives and existing capacities. These are illustrated in Figure 3.1.

Although this analysis is dedicated to renewable energy targets, it includes other transition-related technologies such as heat pumps and EVs. These solutions must be accounted for when setting renewable energy targets as 1) they must be considered in the demand for renewable power – otherwise if they run on fossil fuel-based power they cannot be considered as decarbonisation solutions, and 2) they must be considered when setting targets for “competing” renewable energy solutions, such as biofuels and solar water heaters (SWHs), to maximise the usefulness of investment in enabling conditions, such as infrastructure, and to avoid stranding assets.

3.1 OBJECTIVES AND CONTEXT FOR RENEWABLE ENERGY TARGET SETTING

Renewable energy targets must be set to achieve broader policy objectives and they should be adapted to the specific situation of the jurisdiction where they will be implemented.

3.1.1 POLICY OBJECTIVES THAT SHAPE RENEWABLE ENERGY TARGETS

The main factors driving renewable energy development in a jurisdiction should have a strong role in shaping the way targets are set. These include:

• Achieve climate commitments. Given the urgency of decarbonisation to stay within a global temperature increase of 1.5°C, renewable energy targets need to be aligned with climate targets, including NDCs, GHG or carbon emission reduction targets, targets for phasing out and phasing down fossil fuels, and net zero targets. Such targets need to be matched with renewable energy (and energy efficiency) targets.²² For instance, France has set a target of reducing carbon emissions by 40% by 2030 compared with 1990 levels. This target includes an embedded renewable energy target of 33% as a share of final energy consumption by 2030.

• Increase energy access and reduce energy poverty. The 2022 publication Tracking SDG 7: The Energy Progress Report showed that the world is not on track to achieve any of the targets under SDG7. Although the number of people lacking electricity access fell from 1.2 billion globally in 2010 to 733 million in 2020, progress has been slowing down due to the complexity of reaching unserved populations and the impacts of COVID-19. Moreover, in many countries even where there is access, it is very unreliable. With population growing at a pace that is faster than that of improvements in access to clean cooking, some 2.4 billion people still lacked access in 2020. Based on these trends, it is estimated that 670 million people will still lack access to electricity by 2030 and 2.1 billion people will still lack access to clean cooking, unless global efforts are improved (IRENA et al., 2022). Figure 3.2 shows the targets for universal access to electricity and clean cooking and the progress made toward these targets by 2020.

• Enhance energy security. Energy security and independence were put back at the forefront of policy priorities after the fossil fuel shortages and price increases experienced as the world economy picked up following the COVID-19 crisis, and then more so after the outbreak of conflict in Ukraine (Box 3.1). This is especially the case for Europe and other countries that are net importers of fossil fuels. Globally, the increased focus on energy security has amplified the need to transition as fast as possible to a more secure and reliable energy system based on renewables that shields industry and consumers from geopolitical pressures and fuel price volatility while also being compatible with ambitious climate goals.

Box 3.1 Increase in ambition of renewable energy targets in the European Union REPowerEU

Until 2022 Europe relied on the Russian Federation for 40% of its fossil gas and 27% of its imported oil, valued at around EUR 400 billion a year (Fisher, 2022). The conflict and resulting sanctions have raised concerns regarding energy security and energy costs that have put extremely high financial pressure on consumers and businesses. Some European manufacturing facilities even began reducing operations as electricity prices soared to record highs (France24, 2022).

In response, the European Commission first announced its REPowerEU strategy in March 2022 with the goal of reducing Russian gas imports by two-thirds by the end of 2022 and entirely by 2030. The strategy focuses on three key topics: securing non-Russian supplies of oil and gas, improving energy efficiency, and expanding the use of renewable energy.

If the proposal is adopted, the European Union’s 2030 target for renewables would increase from the current 40% to 45% of the energy mix. The REPowerEU plan would bring total renewable energy generation capacity to 1 236 GW by 2030 (including 600 GW solar PV and 510 GW wind), 15% higher than the 1 067 GW envisaged under Fit for 55. In addition, the EU REPowerEU package proposes a target of 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of imports by 2030. This translates into the need to increase the installed capacity of electrolysers to 65 GW in 2030 (the EU hydrogen strategy originally set a target of 6 GW of electrolyser capacity and 1 million tonnes of green hydrogen production by 2024, to be scaled up to 40 GW electrolyser capacity by 2030) (European Commission, 2022b).

Germany has also increased its ambition. It aims to speed up its shift to renewable power and is looking to reach 100% renewable electricity supply by 2035. Germany is aiming for 80% wind and solar power by 2030. This involves tripling its solar and offshore wind capacity to 200 GW and 30 GW respectively, and doubling onshore wind energy capacity to 110 GW (Brooks, 2022).

• Maximise socio-economic benefits. IRENA has been studying the socio-economic impacts of renewable energy since 2011, addressing jobs, local economic value creation, improved livelihoods, gender and welfare. The latest analysis finds that a global energy transition based on renewables under IRENA’s 1.5°C Scenario can lead to a boost in GDP that is 2.4% greater (on average) than that of the Planned Energy Scenario over the next decade. Economy-wide employment is 0.9% higher on average by 2050. The socio-economic benefits are potentially more pronounced in Africa, where an energy transition based on renewables has the potential to support industrialisation and socio-economic development and improve welfare (Box 3.2). The global estimates mask disparities among regions and countries, depending on country conditions, dependencies and policy implementation.

Box 3.2 Potential socio-economic impacts of the energy transition in Africa with a comprehensive policy framework

Although it might be difficult to transition away from carbon-intensive energy sources, with the implementation of an appropriate policy basket the energy transition presents tremendous promise for Africa.

IRENA’s 1.5°C Scenario pathway predicts on average 6.4% higher gross domestic product (GDP), 3.5% higher economy-wide jobs and a 25.4% higher welfare index than what can be achieved under current plans, up to 2050.

Jobs added in the transition to renewables outweigh those lost by phasing out traditional energy. Every million US dollars invested in renewables between 2020 and 2050 creates at least 26 job-years; every million invested in energy efficiency creates more than 22 job-years annually; and for energy flexibility, the number is 18.

These continent-level benefits hide large disparities between regions and countries. Although all African regions benefit from the transition in terms of GDP, the impact varies across regions based on the existing economic structure and the availability of economic, financial and institutional factors and transition-related skills. The effect on GDP ranges from an additional 1.6% on average above existing plans (Planned Energy Scenario) in West Africa to an additional 15.4% in Central Africa (with 4.9% higher GDP in North Africa, 10% in East Africa and 10.1% in Southern Africa). Differences between countries at the regional level also exist, such as between fossil fuel producers and importers, large and small economies, etc.

Economy-wide job creation also varies, from 1.4% additional jobs compared to the Planned Energy Scenario in 2050 in North Africa to 6.7% in Central Africa (with 2.0% additional jobs in West Africa, 2.9% in Southern Africa and 4.1% in East Africa).

The welfare improvement under the 1.5°C Scenario over the Planned Energy Scenario ranges from 14.6% in North Africa to 39.6% in Southern Africa (19% in East Africa, 22% in West Africa and 33.8% in Central Africa).

Source: IRENA and AfDB (2022).

3.1.2 CONTEXT FOR SETTING RENEWABLE ENERGY TARGETS

Renewable energy target setting needs to consider the given context in terms of current and future energy demand, level of development of the renewables sector, and existing resource potential.

Energy demand across all end uses. Renewable targets need to consider the overall energy demand, its forecast and any changing patterns in all sectors of the economy. The different end uses, including electricity, heating and cooling, and transport, need to be considered in conjunction, with careful consideration of how sector coupling and energy efficiency would affect the future energy mix.

Level of development of the renewable energy sector and needed infrastructure. The targets within the determined timeframe need to be implementable. This is where the current level of development of the renewable energy sector and needed infrastructure play a key role. The targets need to take into consideration the available skillset within local institutions and industry, and the availability of relevant services (supply chain, construction, maintenance, etc.) and resources required for physical infrastructure development.

Technical potential. Setting renewable energy targets requires clarity on the technical potential of various technologies on the ground to select the most suitable energy mix. This is conducted through resource assessments and suitability analyses for specific technologies. Box 3.3 provides an overview of IRENA’s work on resource assessment.

Box 3.3 IRENA’s work on resource assessment

The Global Atlas for Renewable Energy is a free web-based platform that provides users with data and tools to assess their renewable energy potential. The initiative, coordinated by IRENA, is aimed at closing the gap between countries that have access to the necessary data and expertise to evaluate the potential for renewable energy deployment in their countries and those that lack these elements.

Suitability assessment is a GIS-based multicriteria analysis that maps the suitable areas for planning utility-scale solar PV or wind projects. The methodology combines high-quality resource data with data on infrastructure and land features, including road and transmission line networks, topography, protected areas and population density, to estimate the degree of suitability of every parcel of land. This service can support energy ministries and departments with planning energy generation and transmission expansion or setting renewable energy targets.

Zoning assessment identifies the best zones within a country for planning utility-scale solar PV or wind projects. These zones are further characterised with attributes that include potential installed capacity, hourly energy generation profiles, distances to transmission and road infrastructure and LCOE. This service can support countries in developing and implementing their national energy masterplan.

Site assessment is a cost-effective pre-feasibility analysis that supports countries in finding economically viable sites for solar (PV, parabolic trough collector, central receiver system and linear Fresnel) and wind project development. The service relies on site-specific resource profiles, industry standard energy yields and financial assessment methodologies to establish a range of tariffs and levelised costs of a site for potential investment on ground measurements and subsequent development. Through this service, IRENA has assisted authorities – ministries and public utilities in several countries in Africa, Latin America and SIDS – in the selection and screening of more than 140 promising sites for solar and wind power projects.

The SolarCity Simulator is an innovative tool designed to support member countries in assessing their potential for rooftop solar PV installations by testing different policy instruments, incentive schemes and installation scenarios that could lead to potential economic savings and socio-environmental benefits. The methodology relies on a robust power generation model to calculate the annual energy production based on the city’s solar resource profile and 3D building footprints, and a simplified financial model to establish a range of economic indicators, such as payback, equity internal rate of return (EIRR) and investment cash flow. All these indicators are employed to further identify the suitable rooftops for solar PV installation in the city and assess their technical and economic potential. Through this service, IRENA has assisted local authorities in several cities (Antigua and Barbuda, Chongli in China, Ulaanbaatar in Mongolia, Port Louis in Mauritius, Burgunj in Nepal, three markets in Nigeria, Castries in Saint Lucia, Victoria in Seychelles, Kasese in Uganda, and Abu Dhabi in United Arab Emirates) to promote environmentally friendly energy. More information can be found on Solar Simulators: Application to Developing Cities.

Macroeconomic context. At a first glance, it might seem as if countries in difficult macro-economic situations with limited financial capacity might need to reduce their ambitions. However, ambitious targets can drive deployment and socio-economic development as outlined in Box 3.2. Section 2.2.3 showcases many SIDS that are among the LDCs that have set ambitious targets and that rely on international cooperation to achieve them by tying them to conditional NDCs.

As mentioned, the main objectives for renewable energy targets will affect their design vis-à-vis deciding on their statistical basis, scope and coverage in terms of sectors and end uses, indicators, technology specificity, and modalities for implementation. These are discussed in the subsequent sections.

3.2 THE STATISTICAL BASIS FOR RENEWABLE ENERGY TARGETS

When setting renewable energy targets, a decision needs to be made on whether they should be determined as a share of the mix relative to a baseline (with indicators discussed in Section 3.4), or a fixed absolute amount (with indicators discussed in Section 3.5) or a combination of both. The findings are summarised in Table 3.1.

Some of the benefits of renewable energy, such as energy security and emissions and pollution reduction, among others, only materialise if the energy produced actually displaces (imported) fossil fuels. Targets presented as a share of the mix can provide greater clarity on the level of ambition regarding climate goals, as they account for phasing out (or opting out)²³ fossil fuel-based energy and systems. Naturally, this only applies when targets are set to cover a considerable share of the overall mix with renewables. Saudi Arabia’s Vision 2030, for example, has a target for 50% of electricity to be from renewables by 2030. Nigeria’s National Renewable Energy Action Plan sets a renewable energy target of 43% of installed capacity in 2030, representing 29% of final electricity consumption.

Such targets also give better clarity on reducing energy imports for countries that are net importers of fossil fuels. Many SIDS are net importers of fossil fuels and have set 100% renewable power targets, including Antigua and Barbuda, Barbados, Dominica, Grenada, Marshall Islands, Saint Kitts and Nevis, Samoa, Tonga and Vanuatu.

Targets set as a percentage can also give a clear indication of the steps towards achieving universal access to energy. As discussed in Section 3.1.1, the percentage of the population with access to electricity and clean cooking is used as a metric for the targets set in SDG7.

However, when setting targets as a percentage of a mix, energy demand can be hard to predict due to traditional variables that influence forecasts (e.g. population, economy, weather). Determining future electricity demand, for example, must consider many components of the energy transition (Figure 3.3). On the one hand, energy efficiency and conservation, together with the growing uptake of decentralised solutions, are expected to reduce the demand for (centrally produced) electricity. For example, in Australia, electricity demand from the grid contracted a few years ago due to the decline of manufacturing and an increase in the adoption of rooftop solar and energy-efficient appliances (Wood, 2013).

An overestimation of future demand may lead to overproduction and curtailment, or lead to the displacement of other generation technologies at an undesirable cost to the system. Conversely, a sharp increase in electricity demand can be expected in the medium and long term due to electrification of end uses, in particular residential heating and transport.

In addition, when it comes to implementing targets in the form of a percentage of the energy mix, unexpected changes in demand patterns or changes in the baseline calculation can give a false indication of the progress made (See Box 3.4).

Box 3.4 The European Union 2020 renewable energy targets

In 2008 the European Union set the target of 20% of gross final energy consumption to come from renewables by 2020.

The European Union met its 2020 target, with renewable energy consumption reaching 22.1% in 2020. This was driven mainly by energy efficiency and energy savings and sustained growth in electricity generation from renewables. In transport and heating, the share of renewables also increased in the same period, although at a lower rate.

It is important to note that total gross final energy consumption decreased considerably between 2019 and 2020 (down 8%) primarily as a result of measures put in place to contain COVID-19. At the same time, power generation from renewable source was prioritised due to lower operational costs and preferential dispatch: renewable energy consumption as a share of total energy consumption then increased from 19.9% in 2019 to 22.1% in 2020, with an increase of 2.2 percentage points in just one year.

Although decarbonisation goals might have been met that year, this may have given a false sense of being on track to meeting renewable energy targets. Moreover, the methodology for setting the baseline for percentage-based targets might create discrepancy in reporting. This has been an issue especially in countries or situations where the data quality and availability at the time of baseline setting were still subject to improvements. Changes in data quality are common, especially for countries with a developing resource base for renewable energy. Several countries throughout European Union and the Western Balkans region saw their share of renewable energy revised upward following a thorough evaluation of biomass use in households. This meant that many governments throughout the region were able to demonstrate compliance with the EU targets without introducing new policies or measures to encourage renewables. In the case of Croatia, for instance, national statistics prior to 2010 had registered a biomass share in gross final energy consumption of 5.4%; after the revised statistical analysis, the share of biomass doubled to 10.8% (IRENA, 2019b).

Furthermore, targets that are set as a share of the mix can be difficult to implement and monitor for progress.

For all these reasons, some countries have translated their targets from percentages to absolute terms. Morocco, for example, set a target of 52% renewable electricity capacity by 2030 (20% solar, 20% wind, 12% hydro). This was translated into around 10 GW to be added by 2030, consisting of 4 560 MW of solar, 4 200 MW of wind and 1 330 MW of hydropower.

Framing the target in absolute terms can also be easier to plan, implement and monitor compared to share-of-mix targets. Once the target quantity is fixed (and not dependent on demand), policy makers can aim to achieve that amount using a range of instruments, such as auctions, feed-in-tariffs and so on. Monitoring also becomes easier when fixed quantities are involved.

Perhaps more importantly, an absolute amount target can provide clearer commitment from policy makers and more certainty for market participants and investors as it stipulates a specific quantity that must be supplied (e.g. MW of power or number of SWHs installed) or produced (e.g. MWh generated) by a specified time. A target in this form provides a more absolute signal regarding the potential market size to the local industry providing equipment and services, which can encourage investment in different segments of the supply chain. In some cases, it can help leverage existing capacity to support the transition of the economy away from fossil fuels. Norway, for example, set a target to develop 30 GW of offshore wind capacity by 2040, which would allow it to build on the know-how of its existing energy industry.

3.3 THE SCOPE OF TARGETS – SECTOR COVERAGE AND END USES

As shown in Section 2.1, most jurisdictions around the world continue to focus their renewable energy targets on the power sector. However, achieving decarbonisation in line with the objectives of the Paris Agreement will require a more holistic approach, including targets for all end uses and covering all sectors of the economy.

For climate and energy security goals, targets can be set for the energy sector as a whole, aligning them with targets for emission reductions and energy import minimisation. For this purpose, the design of the target may use a primary energy or final energy basis (see Section 3.4.1).

Once the overall target for the energy sector has been defined and aligned with wider goals, the target can be broken down into the various sectors and end uses such as the power sector, transport, and heating and cooling including in industry, taking into account electrification plans (see Box 3.5 for the example of the United Kingdom’s Net Zero Strategy).

Additional sub-targets can also be defined, such as for green hydrogen in the industrial sector, as in France’s target for 10% of the industrial hydrogen mix to be produced using renewable electricity by 2023, up to 40% by 2028, which can then be linked to specific policies. Sector-specific targets and policies can increase opportunities for socio-economic benefits related to industrial development, since specific markets and technologies can be targeted more directly. In the access context, targets for clean cooking and electrification using off-grid renewables are needed.

Table 3.2 presents the benefits of setting targets that cover the whole economy and those that cover specific end uses and sectors.

Box 3.5 The United Kingdom’s Net Zero Strategy

The United Kingdom’s Net Zero Strategy aims to take cross-cutting action to accelerate decarbonisation across seven pillars of the economy, including: power, fuel supply (including hydrogen), industry, heat and buildings, transport, natural resources, waste and greenhouse gas removal. The strategy lays out the broad strands of the road to net zero, while also identifying key quantitative targets for the activities along each strand.

The strategy is complemented by several sectoral and sub-sectoral plans and strategies:

• The Heat and Buildings Strategy pushes the adoption of heat pumps with an eventual ban on fossil-fuelled boilers by 2025 in newbuild homes.

• The Hydrogen Strategy sets the approach for a hydrogen sector, with 10 GW of low-carbon hydrogen production capacity by 2030.

• The Industrial Decarbonisation Strategy provides an overview of targeted measures to facilitate emission reductions in industry, with the hope of positioning the United Kingdom as a hub for low-carbon production, innovation and trade.

• Several transport sector commitments have been adopted, including the decarbonisation of buses, railways, private vehicles, shipping and aviation.

• The decarbonisation of the power sector is envisaged through 40 GW of offshore wind (of which 1 GW floating), supported by smart flexibility systems, carbon capture and hydrogen.

Source: UK Government (2021).

3.4 THE INDICATOR USED FOR TARGETS WHEN THEY ARE DEFINED AS A SHARE OF A MIX

When targets are set as a share of a mix, a decision needs to be made regarding the indicator that is used. This is the case whether the target covers the whole energy mix (Section 3.4.1), the electricity sector only (Section 3.4.2) or other end uses (Section 3.4.3). The findings are summarised in Table 3.3.

3.4.1 SHARE OF RENEWABLES IN THE ENERGY MIX

When determining renewable energy targets as a share of the energy mix, a decision needs to be made on whether they apply to total primary energy supply (TPES) or total final energy consumption (TFEC).

Primary energy supply statistics have traditionally been used in energy systems dominated by fossil fuels and they refer to the total supply of energy in its raw, or unprocessed form (e.g. one kilogram of coal). Belarus, for example, has a target of 8% of its TPES to be from renewable energy production by 2025 and Brazil is targeting a 48% renewable share (36% excluding hydropower) in its TPES by 2029. China also uses this metric in its Five-Year Plans for Renewable Energy (Box 3.7).

If the goal is climate-related, a target that reduces the supply of fossil fuels in their raw form would have more potential to reduce emissions across the whole process of energy conversion to consumption, including inefficiencies. Primary energy supply targets are also helpful when the goal is to reduce energy imports to increase security. For example, in 2015 India set a target for a 10% reduction in crude oil imports by 2022, with the potential for it to be scaled up to a 50% reduction by 2030 (Sarkaritel, 2015). Such a target is precise in the reduction amount because it gives a baseline value with a baseline year and a target year, and it is also specific to both the energy flow (imports) and the product(s) (crude oil) in the energy balance. This target would impact the whole economy since it would reduce the country’s imported supply of oil. But its impact relates to the policies in place that would determine whether the curtailed oil demand would be met by renewables, for example, or by increasing energy efficiency.

However, there are challenges related to the methodology used to calculate the primary energy equivalent of some fuels when using primary energy as a statistical basis for setting a renewable energy target. Gathering energy statistics for the electricity sector on the basis of the physical energy content method²⁴ tends to exaggerate the share of coal, oil, fossil gas, nuclear and biomass in the overall energy mix, as around 60-70% of the primary energy would be lost in the conversion process for these fuels (IRENA, 2015).

Final energy consumption refers to the energy supplied to final consumers in the form of electricity, heat, etc. and excludes conversion losses from transforming primary energy supply into final energy consumption. Typically, most renewable energy data is accounted for in TFEC. As such, the share of renewables in the energy mix would appear greater when looking at the TFEC, as the primary supply would also include inefficiencies in fuel conversions.

Formulating targets as a percentage of TFEC is necessary to determine sector-specific or end-use specific targets (discussed in Section 3.3). For example, Portugal has a target for a 47% share of renewables in its TFEC by 2030, which translates into an 80% renewables share in electricity, 20% in transport and 38% in heating and cooling. Similarly, Croatia has a target for 36.4% renewables in TFEC, 63.8% in electricity, 13.2% in transport and 36.6% in heating and cooling.

3.4.2 SHARE OF RENEWABLES IN ELECTRICITY

When deciding on the indicator for the share of renewables in electricity, the key decision is whether the share is of generation or installed capacity. Key advantages related to each option are presented in Table 3.4.

A target in the form of share of electricity generation can be used to implement targets covering the whole economy (set as a share of TFEC – see Section 3.3). This is the case of Portugal, where the target of a 47% share for renewables in TFEC by 2030 has been translated into an 80% renewable share in electricity generation (along with 20% in transport and 38% in heating and cooling). This can be further translated into absolute amounts of installed capacity. For example, Portugal’s target of an 80% renewable share in electricity has been translated into 9 GW of onshore wind capacity, 0.3 GW of offshore wind, 9 GW of solar PV and 0.3 GW of CSP installed by 2030 (Section 3.5.1).

In addition, targets in the form of share of electricity generation are more effective, as projects that sit idle or get curtailed would not be included while monitoring progress. China, for example, has moved from using added capacity to percentage of additional generation from non-fossil fuels²⁵ to better ensure climate and energy security goals are actually met (Box 3.6). Brazil has set a target of 81% renewables in total electricity generation by 2029, specifying a 34% share excluding hydropower to ensure a diversification of the mix and energy security in dry seasons. It is important to note that, as TFEC implies, these targets are not based on “busbar” generation, but rather on actual electricity sales. In other words, after grid losses. In terms of monitoring and the statistical basis of target compliance (such as in US RPS targets), most target compliance is based on the actual percentage of final electricity sales (which is the share of final electricity consumption). In countries where grid losses are quite high, this can be quite significant.

Targets in the form of share of installed capacity, whether it is in the form of percentage of total installed or percentage of added capacity, are easier to quantify, monitor and translate into policies. Morocco’s example is a case in point, where the target for 52% of installed capacity to be renewable by 2030 is translated into targets for installed capacity of different technologies (4 560 MW of solar, 4 200 MW of wind and 1 330 MW of hydropower). Several rounds of auctions have been achieved, whereby around 2 500 MW have already been awarded (IRENA and AfDB, 2022). South Africa also translated its target in its 2019 Integrated Resource Plan of 41% of renewable capacity by 2030 to 17 742 MW of wind, 8 288 MW of solar PV, 4 600 MW of hydropower and 600 MW of CSP and uses auctions to achieve them, among other instruments (Owusu-Mante, 2020).

3.4.3 SHARE OF RENEWABLES IN END USES

As discussed in Section 3.4.1, a target in the form of the share of renewables-based systems, fuels or hydrogen as part of the total gives a clean indication of the plans to phase out (or not opt for in the case of hydrogen) fossil-based alternatives.

For systems such as EVs, FCEVs and SWHs, one important decision is whether to frame the target as a share of the total number of systems in use by or after a given year, or as a share of the systems added during or after the time frame (Table 3.5). As an example of the latter, bans on combustion engine vehicle sales, such as the European Union’s and the state of California’s by 2035, effectively mean a target of 100% of vehicles added after 2035 are to be EVs or FCEVs. Paris on the other hand, is banning all combustion engine cars by 2030, meaning 100% of cars on the street must be EVs or FCEVs. This type of design is more suited to achieving climate and pollution goals, and energy security when fossil fuels are imported, as it mandates the phase-out of all combustion engine cars, whereas the sales option only helps indicate the direction of the future market for EVs. Although information on additional systems is very important for consumers, car manufacturers and distributors, and for planning the city infrastructure, it does not give a clear indication of the percentage of combustion vehicles that will be retired. For both design options, it is important to give industry players enough time to adjust to the target (e.g. in case of a ban on combustion engine vehicles), and to complement the target with other policies in order to minimise socio-economic losses.

For fuels and gas, targets can only be designed as a blending percentage, meaning biofuel and biogas or green hydrogen, respectively. Such a target helps both climate and energy security goals. Blending targets can be increased in ambition gradually after their introduction. India, for example, first introduced an ethanol blending target of 1% in 2014, then increased it to 5% in 2018/19, and then again to 10%. The latest target was achieved five months before the deadline (2022), prompting a decision to bring forward the target of reaching 20% by 2030 to 2025/26. In addition to benefits related to climate and reduced pollution, this target aims to cut import bills by USD 4 billion a year, enable the better use of damaged food grains and increase farmers’ incomes and investment opportunities. However, one big challenge is that India would need to increase sugarcane cultivation, using more arable land and groundwater, thereby impacting food security at a time when India ranked 101 out of 116 countries according to the World Hunger Index 2021. In addition, existing vehicles that are compatible with 5-10% ethanol blended petrol would need investment in additional retrofitting and calibration and stock replacement (The Times of India, 2022).

For hydrogen, as governments increasingly set strategies and targets for its use, targets are being set for the percentage that would be renewables-based. This is the case in France, for example.

3.5 THE INDICATOR USED FOR TARGETS WHEN THEY ARE DEFINED AS AN ABSOLUTE AMOUNT

3.5.1 AMOUNT OF ELECTRICITY – CAPACITY-BASED VERSUS OUTPUT-BASED

When designing targets for an absolute amount of renewable electricity, the key decision is whether to frame the target as capacity-based (e.g. MW for electricity sector capacity) or output-based (e.g. MWh for electricity generation) or a combination of both. The advantages of each are summarised in Table 3.6.

On the one hand, capacity-based targets may be easier to monitor and track than targets set in output terms, especially from distributed technologies such as solar rooftop PV. For example, in 2015 India set a target of 100 GW of solar capacity by 2022, 60 GW of which was to come from utility-scale projects and the rest from solar rooftop mounted on commercial, industrial and residential buildings (howindialives.com, 2022).

Also, capacity targets can be easier to translate into policies and measures such as auctions, as in the case of Morocco and South Africa, or volume-limited feed-in tariffs (FITs) such as in Malaysia, which are often formulated in capacities. The United Kingdom has also set targets in the form of installed capacity, and is targeting 70 GW of solar by 2035 and 50 GW of offshore wind by 2030. In July 2022, 11 GW of offshore wind were auctioned in one round (IHS Markit, 2022).

On the other hand, output-based targets enable the focus to be on production (measured in terms of electricity sales) rather than capacity. This approach provides more accurate information regarding the effectiveness of the target as it does include any plants that are kept idle or curtailed. It also incentivises the efficient operation of power plants, which contributes to lowering the LCOE. Output-based targets also enable the translation from percentage-based generation targets into absolute quantities. For example, Burkina Faso is planning for 27% of electricity generation to be from renewables by 2030, equivalent to 685 GWh.

Some jurisdictions have framed their renewable energy targets in both capacity and output terms, linking one to the other using capacity factors. Uganda’s SE4All Action Agenda, for instance, has a target for 18 800 GWh of electricity to be generated from renewables in 2030, representing 96% of total electricity production, which implies reaching almost 3 GW of installed renewable energy capacity by 2030.

One last decision to make is whether the target is for the amount to be added by a given timeline, or whether it is for the total amount by that timeline. The former gives a clearer signal of the future market, while the latter takes into consideration any potential retirement of plants (similar to what was presented for systems in Table 3.5).

Finally, absolute amount targets can be used in the energy access context, for power in the form of installed capacity of off-grid technologies, such as Niger’s target of 100 MW of off-grid renewables by 2030 or Uganda’s target of 700 kW of solar home systems by 2017; or the number of solar home systems/lanterns/kits installed. Ghana’s National Renewable Energy Action Plan, for example, included the targets for installing 100 000 solar home systems and 2 million solar lanterns by 2020. While a target expressed as an absolute amount is easier to plan, monitor, fund and achieve, it does not give an indication of the effectiveness of the target, in terms of whether these systems will be used and maintained, or not. It also does not provide any information on the share of people remaining without access to energy.

3.5.2 AMOUNT OF RENEWABLE ENERGY FOR END USES – NUMBER OF SYSTEMS OR CAPACITY INSTALLED VERSUS OUTPUT

Targets for renewables in end uses are becoming more widespread. These can be framed as the total number of systems to be introduced by a given timeline, which is the most common way of setting targets for SWHs. For example, the Seychelles’ Sustainable Development Strategy includes the installation of 1 000 SWHs by 2030 and the development of five pilot biogas plants.

Targets for end uses framed as the number of systems are popular for renewables-based clean cooking. For example, the Renewable Energy Policy for Uganda aimed to install 100 000 household biogas systems by 2017. Most biogas programmes,²⁶ such as the National Biogas Programme in Viet Nam, the National Programme of Biodigesters of Burkina Faso, and Kenya’s Biogas Programme, use the number of biodigesters as a metric for deployment. But in other contexts, an indicator for biogas targets can be the volume produced, such as the European Union’s 2030 biomethane proposed target (IRENA, IEA and REN21, 2020).

When it comes to fuels, as more countries set targets for green hydrogen, a decision needs to be made on whether targets are to be framed as installed electrolyser capacity (e.g. Colombia’s 1-3 GW by 2030, France’s 7 GW by 2030), or output, in term of tonnes of green hydrogen produced (e.g. Japan’s target of 300 kt by 2030), or both (such as the Netherlands’ 3-4 GW electrolyser capacity and 141 kt by 2030). As discussed in Box 3.1, the EU REPowerEU package proposes a target of 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of imports by 2030, translated into an installed electrolyser capacity of 65 GW in 2030 (European Commission, 2022b).

Although framing green hydrogen targets as tonnes of green hydrogen gives more clarity on the amount available, imported or exported, supporting climate and energy security goals, it might be difficult to estimate the size of the electrolysers and infrastructure needed at this early stage of development of the sector. As such, framing green hydrogen targets in terms of electrolyser capacity can be more straightforward and can be simpler to define and implement until the technology picks up and enough data are collected to help calculate estimates. These considerations are summarised in Table 3.7.

3.6 TECHNOLOGY SPECIFICITY OF TARGETS

The issue of whether renewable energy targets (and renewable energy policy more broadly) should be technology-neutral or technology-specific frequently comes up in the policy debate. At the beginning of the 2000s, policy makers around the world started following a cost-based remuneration approach, which resulted in technology-specific support and technology-specific targets (Jacobs, 2014). In addition, integrated resource plans used for power system planning are typically developed using least-cost system optimisation and result in technology-specific deployment trajectories, which need to be translated into targets for different technologies. As such, countries using integrated resource planning cannot adopt a technology-neutral approach. The choice between technology-specific and technology-neutral targets carries certain trade-offs, as summarised in Table 3.8.

Technology-neutral targets can allow for more simplicity and flexibility at the design stage, and as such they could be an attractive option for countries at the early stages of renewable energy market development. Iran (Islamic Republic of), for example, has set a target of 7 500 MW of installed renewable energy capacity by 2030. Objectives for emission reductions or fossil fuel savings can be met with generation from any renewable energy technology that fulfils certain minimum criteria (e.g. resource availability, compatibility with demand patterns). In the early stages of deployment in 2009, the Emirate of Abu Dhabi (United Arab Emirates) started with an aspirational target of 7% of power generation to be from renewables by 2020. As the market evolved, the UAE Energy Strategy 2050 announced more technology-specific targets.

Another reason why technology-neutral targets can be strategic in the early stages of renewable energy development is that they allow markets to identify the most cost-effective technologies. However, this can crowd out other emerging technologies, limit diversification of technologies in the market and potentially increase the costs of reaching the target in the long run by increasing the costs of balancing the system, or by delaying cost reductions and innovation in other technologies.

Technology-specific targets avoid the competition between technologies by assigning targets for each technology. By promoting the simultaneous development of a range of different options through specific targets, policy makers can enable more technologies to emerge and to grow. Such diversification could lead to benefits such as resilient systems and fewer integration issues.

Although encouraging less mature technologies through technology-specific targets may increase the cost of achieving a given renewable energy target in the short term, they enable the development of local value chains of these technologies. For example, the technology-specific targets in Morocco and South Africa, together with policies that were put in place to support local industries, have led to the development of solar and wind sectors in various segments of the value chain, with socio-economic benefits such as income and jobs (IRENA, 2019a).

However, the design of technology-specific targets could be more resource intensive, as several factors and assumptions need to be weighed in, such as resource availability and evolution of markets conditions, technology prices and technology capabilities. In addition, specific targets might be challenging and subject to political meddling.

3.7 MODALITIES FOR TARGET IMPLEMENTATION

Key decisions regarding the design of targets relate to the modalities for their implementation. These include whether targets are mandatory or aspirational, short term or long term, and the process for their review and revision.

3.7.1 SHORT- TO MEDIUM-TERM AND LONG-TERM TARGETS

In the current discussions on climate and sustainable development goals, the years 2030 and 2050 are used as short- to medium-term and long-term target years, using 2020 as a baseline. IRENA, for example, analyses the pathways for staying within 1.5°C by 2030 as medium term, which aligns with most of the targets set at the national level (quantified in Chapter 2), and 2050 as long term, which is used as a target year in most 100% renewable electricity and net zero pledges. Short- to medium-term targets and long-term targets both have benefits, summarised in Table 3.10.

Short- to medium-term targets can introduce a sense of urgency and motivate stakeholders to act. They enable faster implementation and more effective learning and can coincide with electoral cycles. The periodic nature, mostly in the form of five-year planning, allows for a minimum level of flexibility and adjustment. China and India, among others, use five-year plans to frame the development of their energy sectors. Since announcing its first medium- and long-term strategy on renewable energy in 2007, China has periodically revised its renewable energy targets in its Five-Year Plans (FYPs). The latest is discussed in Box 3.6.

Box 3.6 China’s 14th Five-Year Plan

China announced its 14th Five-Year Plan (FYP) for renewable energy in 2022, presenting the renewable energy roadmap for 2021-2025. The 14th plan focuses on energy security, while helping China achieve the climate commitments in its Nationally Determined Contribution: installing 1 200 GW of solar and wind power capacity, ensuring 25% of energy consumption will be met by non-fossil fuels by 2030 and achieving carbon neutrality by 2060.

The 14th FYP target of supplying 25% of China’s energy from non-fossil sources by 2030 is unchanged from the 13th FYP. But according to the 14th FYP, more than half of the increase in electricity demand will be filled by renewables. The new plan aims for a total renewable energy output of at least 1 000 million tonnes of coal equivalent (Mtce) by 2025 – up from 680 Mtce in 2020 – equivalent to an annual increase of at least 64 Mtce.

The 2021-2025 plan entails an increase in the share of renewables from 15.9% in 2020 to 20% by 2025 and details a series of targets, as shown in Table 3.9.

China has exceeded its renewable energy targets in the last three FYPs, especially for solar and wind, which were set as capacity increases, with no clear indication on the effectiveness of those plants in terms of actual generation. The 14th plan is more ambitious in the sense that it imposes a requirement for new renewable generation to make up more than 50% of the increase in demand. This has been estimated as being equal to an increase in generation from wind and solar of around 150 TWh annually over the 14th FYP period of 2021-2025.

Long-term targets provide a key signal to investors, developers, manufacturers and service providers regarding the opportunities available in a jurisdiction in the long run. In particular, investments that are capital-intensive, such as in manufacturing, would be far less likely to occur without clear long-term government-led commitments. In the power sector, network planning and expansion is resource-intensive, and requires long-term visibility. Moreover, to build the human capacity needed in the value chain (e.g. logistics, installation, operations, supply, finance and other related sectors), a short-term target of five years is most likely not sufficient.

Short- and long-term targets both have their merits. To have the best of both worlds, policy makers could consider a balanced combination of broad, long-term targets, articulated into a series of short- to medium-term targets. Setting short- to medium-term targets by backcasting a long-term trajectory can reconcile short-term goals with long-term objectives. In an attempt to strike this balance, a growing number of jurisdictions have introduced “stepped” or “tiered” renewable energy targets. This generally involves setting a long-term, overarching objective combined with a series of interim steps. In Canada, for example, Alberta’s Renewable Electricity Act sets interim targets to track progress under its Renewable Electricity Act. In February 2019 the minister of energy established interim targets of 15% by 2022, 20% by 2025 and 26% by 2028 to reach 30% renewable electricity by 2030. The Republic of Kazakhstan (Kazakhstan) has set a target of 6% renewable energy share of power generation by 2025, 23% by 2035 and 50% by 2050. Malaysia has set a target of 31% renewable energy share in the power mix by 2025 and 40% by 2035.

3.7.2 MANDATORY AND ASPIRATIONAL TARGETS

There is a wide variety of target types, ranging from aspirational statements to energy strategies and action plans, up to fully articulated targets, accompanied by clear, quantifiable and legally binding obligations (Figure 3.4). As markets mature, renewable energy targets tend to improve in their specificity and measurability, and they tend to become more binding.

Aspirational targets are often common in markets and jurisdictions in the early stages of renewable energy development. At this stage, the objective is to start mobilising the industry and provide a signal regarding the future trajectory of the country. As experience and know-how on technology costs, performance and other technology dynamics improve, and the capacity of institutions covering energy data and policies develops, aspirational targets can be updated and become more binding.

When designing mandatory or binding targets, it is important to determine specific enforcement and compliance mechanisms: who is responsible for achieving the target, the government itself or a publicly owned or private utility? Are there any fines or penalties for not complying? What entity is responsible for collecting the fines or penalties? Can exceptions for non-compliance be made (such as due to force majeure)?

In most countries, the obligation to meet targets is typically imposed on governments themselves, either in the form of national renewable energy action plans, power development plans, or national energy and climate plans. In such cases, targets are considered binding when they pass into law. This means that the targets have been ratified by the executive or legislative body, which gives them credibility in the eyes of potential investors. At the same time, embedding the targets in law makes it harder for any future government, or a governing party, to repeal the targets. But it is still not clear how binding such a plan is if a country does not belong to a certain bloc – such as the European Union – or group of countries where a member country would be held accountable or penalised for not meeting its targets. The European Union’s mechanism for penalising member states that do not meet their emission reduction targets is described in Box 3.5.

One effective way of making targets binding is assigning them to specific entities through regulatory measures and policy instruments. In the case of electricity, utilities can be mandated to increase electricity generation from renewables through renewable portfolio standards (RPS) as in the United States of America and the Philippines, or renewable portfolio obligations (RPO) as in India. As a further example, market-based approaches, such as a cap-and-trade programme, set a limit on emissions from particular sectors (see Box 3.7). In the transport sector, binding targets in the form of biofuel blending mandates are the responsibility of fuel distributors. At the heart of designing binding targets is adequate reporting and monitoring, combined with clear consequences such as financial penalties for non-compliance. As such, a growing number of targets worldwide, including in the European Union and in the United States of America, include various forms of financial penalty (Box 3.7).

Naturally, binding targets can be more effective in achieving aspirations, developing local value chains and creating jobs, as they give a stronger signal to developers, investors and manufacturers about the certainty of opportunities available in a given market.

Box 3.7 Compliance with renewable energy targets and renewable portfolio standards in the European Union, the United States and the Philippines

Members of the European Union that fail to meet their climate targets have to pay an “excess emissions penalty”, which is equivalent to the fines paid under the EU Emissions Trading System (EU ETS). If a member state fails to pay this penalty, the excess emissions are deducted from the ETS allowances to be auctioned by that member state. The Commission instead auctions these allowances and the revenues are to be invested in a fund dedicated to research and development into and support for renewable energy, energy efficiency and energy conservation in the European Union (EURACTIV Press Release Site, n.d.).

Binding RPS targets exist in 30 US states plus the District of Columbia and range from low (8.5% by 2026 in the state of Ohio) to ambitious targets (80% by 2040 in New Mexico, and 100% by 2045 in Hawaii). Since targets in the United States of America are primarily imposed on utilities, annual reporting is a core part of compliance with US RPS policies. Utilities are required to submit annual reports to the regulator detailing how much renewable electricity they have either generated themselves, purchased from third Parties (such as independent power producers) or procured in other ways, such as through renewable energy certificates (RECs). The total has to amount to a minimum threshold, typically framed as a percentage of final retail electricity sales. For any shortfall against their legally binding target, load-serving entities are required either to pay a fine or pay the alternative compliance payment (Barbose, 2021).

In the case of the Philippines, the RPS law stipulates that the country’s 35% renewables target is imposed on distribution utilities, electric cooperatives and retail electricity suppliers. In addition, the Philippines provides different guidelines for companies serving customers in on-grid as well as those serving customers in off-grid areas (Philippine Electricity Market Corporation, n.d.)

3.7.3 THE PERIODIC REVIEW AND REVISION OF TARGETS

A key design element of renewable energy targets is to link them to regular monitoring of progress to allow for timely adaptation to changes in policy objectives and priorities, market dynamics, renewable energy costs and learning curves. Periodic revisions are also important as data collection and energy balances improve. Regular monitoring enables the tracking of progress against targets, leading to target adjustments that can allow for an increase in ambition in many cases.

Many countries and jurisdictions have raised their targets over time, such as China’s Five-Year Plans and the updates made in the European Union. In 2018, building on the 20% target for 2020, the EU Renewable Energy Directive established a new target of at least 32% of energy to be renewable by 2030, with a clause for a possible upward revision by 2023. But in July 2021 the European Commission presented a proposal to increase the target to at least 40% from renewable energy sources in the European Union’s gross final energy consumption by 2030. And most recently in May 2022 the Commission published the REPowerEU plan to reduce European Union’s dependence on imported fuels from The Russian Federation before 2030 by speeding up the energy transition. The Commission proposes to increase the target of renewables in power, buildings, industry and transport to 45% by 2030 (Figure 3.5).

For jurisdictions to track progress towards goals (and of course to set related targets and develop renewable energy policies), the availability of accurate, timely and accessible renewable energy statistics is essential. Figure 3.6 illustrates the data needed before setting the target, while monitoring progress and after achievement of the target.

The challenges faced while collecting renewable energy data and statistics vary from one jurisdiction to another. These can include the absence of a clear mandate for data collection, and a lack of human resources, technical knowledge or funding. In some jurisdictions, challenges may be addressed by expanding and adapting existing processes for the collection and management of energy data and statistics. In other jurisdictions, new procedures and protocols for renewable energy data collection might be needed.

Key requirements for effective data management needed for target setting and monitoring of progress include appropriate legal and institutional frameworks, properly defined data requirements, appropriate data collection mechanisms, and the availability of skilled personnel and procedures for the analysis, review and validation and dissemination of data.

Some examples of data collection objectives and the data that might be required to meet these objectives are given in Table 3.11.

4

4 CONCLUSIONS AND RECOMMENDATIONS

Global developments show the need for immediate action to increase ambition on renewable energy deployment, as well as the development of local renewable energy industries to enhance energy security and maximise socio-economic benefits. Governments must move rapidly in designing targets that can help achieve the pressing objectives of reducing GHG emissions from burning fossil fuels, limiting dependence on energy imports, achieving universal access to clean, affordable and reliable energy, and meeting other socio-economic goals.

Pledges made to date, including in Nationally Determined Contributions (NDCs) under the Paris Agreement, should be significantly enhanced to unlock the full potential of renewable energy, which will be crucial to achieving climate goals.

Decision makers at the national, subnational, city and corporate levels need to increase the level of ambition of the commitments to renewable energy in their climate pledges (including net zero pledges). Net zero targets must be backed by concrete plans to develop and deploy renewable energy in all end uses. Renewable energy deployment targets need to increase sharply to reflect long-term pathways towards net zero emissions.

The current energy crisis should not halt the progress towards implementing fossil fuel phase-out (or phase-down) plans and schedules. As much as possible, countries should avoid backtracking on their targets for coal phase-out (or phase-down) and should follow up their pledges with more specific targets, plans and timelines for a full phase-out. International collaboration will be essential to carry out the transition away from fossil fuels in a just and equitable manner, to prevent and manage certain transition risks such as the displacement of jobs or other impacts on livelihoods. South Africa’s Just Energy Transition Partnership supported by the European Union, France, Germany, the United Kingdom and the United States can serve as a model for such collaboration.

For renewable energy targets in NDCs to become reality, they need to be aligned with renewable energy targets set in national energy plans and laws. This would increase the effectiveness and credibility of both, and reinforce clear signals to investors, developers and other players across the supply chain, thus supporting the deployment and development of the renewable energy sector. In some cases, this will involve establishing or updating national targets. In other cases, it will mean incorporating existing national targets into the next round of NDCs.

For renewable energy targets to be useful, they need to be ambitious enough to guide deployment on a path that exceeds historical trends and current deployment levels.

In order to keep the world on track to achieving carbon neutrality by 2050, the level of ambition of renewable energy power targets set for 2030 needs to at least double. At the same time, more targets need to be set for renewables in heating and cooling, and transport.

Ambitious targets should be more widespread, as they are currently concentrated in G20 members (accounting for almost 90% of global aggregated renewable power targets). With further international collaboration and support, more ambitious targets can be set in the rest of the world. One region with high renewable energy resource potential and relatively low renewable energy targets is sub-Saharan Africa, where renewable energy is fundamental to the region’s future and 77% of the world’s population without electricity access live; yet it accounts for just 2.6% of global targets by 2030.

Targets in the power sector continue to focus on solar PV and onshore wind. To harness the full potential of renewable energy resources and support the development of less mature technologies such as concentrated solar power, dedicated targets should be set. Similarly, sector- and technology-specific targets need to be set for end uses, such as for the use of green hydrogen in industry.

Targets need to be designed to serve country objectives, and their design should consider the specific context.

The main function of targets is to signal a country’s long-term political commitment to renewable energy, which is required to attract the investment needed – public and private – to develop the sector. The more detailed, specific and credible the target is, the more likely it will be to drive deployment, including through increased market confidence. This can ultimately translate into lower costs of capital and hence more project development.

The main objectives driving the country’s renewable energy deployment need to be put at the centre stage of target setting. These may include GHG emission and pollution reduction, energy access, security, reliability and affordability, and socio-economic development goals.

The design of targets should also consider the specific context. The factors to consider when designing targets include resource availability and the technical potential to select the most suitable energy mix, future energy needs across all end uses to avoid shortages and at the same time ensure resources are not wasted on overcapacity, and the level of development of the renewable energy sector and needed infrastructure to make sure the targets are achievable within the set timeframe.

While designing targets, decisions need to be made regarding their statistical basis, scope in terms of sectors and end uses covered, indicators, technology specificity and modalities for implementation.

To achieve the objectives of reducing GHG emissions and fossil fuel imports:

Targets should be presented as a share of the energy mix, covering the whole energy sector to account for phasing out (or opting out of) fossil fuel-based energy and systems and provide more clarity on the level of ambition on climate goals and reducing energy imports (for countries that are importers of fossil fuels).

Targets that reduce the supply of fossil fuels in their raw form (defined as a share of primary energy supply) have more potential to reduce energy imports and emissions across the whole process of energy conversion to consumption, including inefficiencies. Examples include China’s target to supply 25% of its energy from non-fossil sources by 2030 in its 14th Five-Year Plan (2022) and India’s target set in 2015 to reduce crude oil imports by 10% by 2022, with the potential to be scaled up to a 50% reduction by 2030.

However, using primary energy as a statistical basis for setting a renewable energy target poses a problem related to the methodology used to calculate the primary energy equivalent of renewables. To overcome this, they can be translated into targets as a share of final energy consumption.

Once the overall target for the energy sector has been defined and aligned with wider emission reduction and energy import minimisation goals, the target can be broken down into the various sectors and end uses, such as the power sector, transport, and heating and cooling, taking into account electrification plans. For example, Portugal’s target of a 47% share of renewables in its final consumption by 2030 translates into a share of 20% in transport, 38% in heating and cooling, and 80% renewables in electricity. Additional sub-targets can also be defined, which can then be linked to specific policies such as France’s target for 10% green hydrogen use in industry. When setting such targets, energy demand must be predicted taking into consideration traditional variables that influence forecasts (e.g. population, economy, weather), in addition to many components of the energy transition, such as energy efficiency targets and measures and increased electrification of end uses, among other factors.

In the power sector, targets in the form of the renewable share of electricity generation are more effective for the objectives of emission reductions or fossil fuel savings than the renewable share of installed capacity, as projects that sit idle or get curtailed are not included when monitoring progress.

Moreover, the objectives of emission reductions or fossil fuel savings can be met with generation from any renewable energy technology that fulfils certain criteria (e.g. resource availability, compatibility with demand patterns). As such, technology-neutral targets can be used, especially in countries at early stages of renewable energy market development, as they allow for greater simplicity and flexibility in the design and allow markets to identify the most cost-effective technologies. However, technology-neutral targets can crowd out other emerging technologies, limiting diversification of the mix and potentially increasing the long-term costs of reaching the target by delaying innovation and cost reductions in other technology areas, or by increasing the costs of balancing the system.

In end uses, for systems such as EVs, FCVs and SWHs, framing the target as a share of the total number of systems in use by a given year (e.g. Paris’s ban on all combustion-engine cars by 2030, meaning 100% of cars on the street must be EVs) is more suitable for achieving climate and pollution goals, and energy security when fossil fuels are imported, as it includes the phase-out of fossil fuel options (e.g. all combustion engine cars).

To maximise the socio-economic benefits from the development of local industries for renewable energy:

Percentage-based renewable energy targets should be translated into absolute targets in order to provide clearer commitment from policy makers and more certainty for market participants and investors, as they stipulate specific quantities that must be installed (e.g. MW of power or number of solar water heaters) or produced (e.g. MWh generated) by a specified time. This is the case for Portugal, where the 80% target for renewables in electricity generation by 2030 was translated into 9 GW of onshore wind capacity, 0.3 GW of offshore wind, 9 GW of solar PV and 0.3 GW of CSP installed capacity.

Defining technology-specific targets enables the development of local value chains for these technologies. For example, the technology-specific targets in Morocco and South Africa, together with policies that were put in place to support local industries, have led to the development of solar and wind sectors in various segments of the value chain, with socio-economic benefits such as the generation of income and jobs.

A target in this form can also help leverage existing capacity to support the transition of the economy from fossil fuels. Norway, for instance, set a target to develop 30 GW of offshore wind capacity by 2040, which allows it to build on the know-how of its existing energy industry.

For systems such as EVs, FCVs and SWHs, framing the target as a share of all the systems added from a specific date can give an indication on the future market for these systems (e.g. for EVs). Examples include the bans on combustion engine vehicle sales in the European Union and the state of California by 2035, meaning that 100% of those added after 2035 are to be EVs. This is very important to mobilise suppliers of these technologies throughout their supply chains.

To achieve universal access to energy:

Targets should be presented as a share of the percentage of the population with access to electricity and clean cooking to account for changing demographics, such as population growth, and provide information on the share of people remaining without access. Separate targets are needed specific to electrification and clean cooking using renewables. Such targets need to be translated into an absolute amount of capacity or number of systems to deploy.

For electricity access, capacity-based targets in the form of installed capacity of off-grid technologies are easier to plan, monitor, fund and achieve, but they do not give an indication of the effectiveness of the target, in terms of whether these systems will be used and maintained, or not. Examples include Niger’s target for 100 MW of off-grid renewables by 2030 and Uganda’s target for 700 kW of solar home systems by 2017. Output-based targets enable the focus to be on production rather than capacity, which provides more accurate information regarding their effectiveness. Targets can be framed in both capacity and output terms, with one being linked to the other through capacity factors. Uganda’s SE4All Action Agenda aims for 18 800 GWh of electricity to be generated from renewables in 2030, representing 96% of total electricity production, which implies reaching almost 3 GW of renewable energy installed capacity by 2030.

For renewables-based clean cooking, targets framed as the total number of systems to be introduced by a given deadline are popular as they are simpler to define, monitor and implement than percentage-based targets. Most of the biogas programmes, such as the National Biogas Programme in Viet Nam, the National Programme of Biodigesters of Burkina Faso, and Kenya’s Biogas Programme, use the number of biodigesters as a metric for deployment.

A balanced combination of long-term targets, articulated into a series of short- to medium-term targets, is ideal for achieving a combination of policy objectives.

Long-term targets provide an indication of the country’s climate commitments and are a key signal to developers, investors, service providers and manufacturers as to the long-term opportunities available in a given market. In particular, capital-intensive investments, such as in manufacturing, would be far less likely to occur without clear long-term commitments. In the power sector, network planning and expansion are time-intensive processes and they also benefit from long-term visibility. Furthermore, to build the human capacity required over time in the financial, logistics, installation, operations, supply and related sectors, a short-term renewable energy target of three to five years is unlikely to be sufficient.

Short- to medium-term targets can introduce a sense of urgency and motivate stakeholders to act. They enable more effective implementation and rapid learning from the policy process and can coincide with investment and electoral cycles. In the case of five-year plans (e.g. China’s), the periodic nature of five-year planning allows for a high level of flexibility and adjustment.

Setting short- to medium-term targets by backcasting a long-term trajectory can reconcile short-term goals with long-term objectives. A growing number of jurisdictions have introduced “stepped” or “tiered” renewable energy targets which involves setting a long-term overarching objective combined with a series of interim steps. These include Alberta (Canada) and Kazakhstan.

Aspirational targets should become binding.

Targets are considered mandatory or binding when they pass into law. This means that the targets have been ratified by the executive or legislative body, which gives them credibility in the eyes of potential investors and makes it harder for any future government, or a governing party, to repeal the targets.

At the heart of designing binding targets is adequate reporting and monitoring, combined with clear and specific compliance and enforcement mechanisms (e.g. fines or penalties if the target is not achieved) and the designation of an entity that is responsible for achieving them. One effective way of making targets binding is assigning them to specific entities through regulatory measures and policy instruments.

In the case of electricity, utilities can be mandated to increase electricity generation from renewables through renewable portfolio standards (RPS) as in the United States and the Philippines, or renewable portfolio obligations (RPO) as in India. In the transport sector, binding targets in the form of biofuel blending mandates are the responsibility of fuel distributors. As another example, market-based 1approaches, such as a cap and trade programme, set a limit on emissions from particular sectors.

A key design principle of renewable energy targets is to link them closely to regular monitoring of market conditions to allow for timely adaptation to changes in policy objectives and priorities, market dynamics, renewable energy costs and learning curves.

For jurisdictions to track progress towards goals (and of course to set related targets and develop renewable energy policies), the availability of accurate, timely and accessible renewable energy statistics is essential.

Periodic revisions are important as data collection and energy balances improve. In many cases, monitoring and adjustment can allow for an increase in ambition. Many countries and jurisdictions have raised their targets over time, such as in China’s Five-Year Plans and the updates made in the European Union.

ANNEX 1: METHODOLOGY

All targets in the power sector are quantified in terms of capacity in megawatts (MW). While renewable energy targets in the power sector – in both NDCs and national energy plans – are typically expressed in terms of fixed capacity (in MW), in many countries they may be cited as a percentage of the electricity mix (e.g. 45% renewable energy share of electricity generation), and in some cases they may be a combination of both.

The estimation method for these three cases is described below:

1. In case a country expresses fixed targets in terms of MW, the target is taken as is.

2. In case the target is expressed as a share (e.g. Country A plans to reach 68% share of renewable energy in the electricity generation mix by 2030), the following steps are followed:

a. Overall electricity generation is obtained (if available in official national data) or approximated based on a 10-year historical cumulative annual growth rate (CAGR).²⁷ Given that for some countries (e.g. many SIDS), baseline generation may be very low, resulting in a very high growth rate that may not be realistic to project into the future, a growth rate of 1-2% is often assumed.

b. The overall renewable energy generation in the target year is obtained by multiplying the targeted share with the overall electricity generation.

c. Next, the technology-specific share of the renewable electricity mix is obtained (if available in official national data) or estimated. The shares are assumed to equal the share of a technology-specific capacity addition as a proportion of the overall renewable capacity added over the last five years. For example, for a technology like solar, the capacity added between 2017 and 2021 is divided by the overall renewable capacity added during this period. This share is assumed to be the same as the technology-specific share in the renewable electricity mix in the target year. Note that some adjustments are inevitable to account for a baseline capacity for technologies that have had no recent deployment (which is often the case for hydropower and bioenergy).

d. Once the technology-specific generation in target year is obtained, the following formula is used to calculate the MW equivalent of the target. Capacity factor data is obtained from IRENA’s costs database.

3. In cases where targets are expressed as both a share of the electricity mix and fixed capacity, e.g. “Country A plans to reach a 68% share of renewable energy share by 2030; specific measures include the addition of 30 MW of solar PV”, it is assessed whether the fixed capacity target alone will be enough to reach the targeted share. In case it will not be enough, the share-based target is estimated and adjusted based on the fixed capacity target.

Note: Certain assumptions and approximations are made to account for the gaps and ambiguities in available data. These are made on a country-by-country basis to reflect local conditions where necessary.

Data on energy generation and renewable energy capacity can be found on IRENA’s website here.

Data on renewable energy costs can be found here.

ANNEX 2: RENEWABLE ENERGY TARGETS IN NATIONAL ENERGY PLANS

The renewable energy targets presented in this Annex were collected as of September 2022 using desktop research and were shared with IRENA Member States for verification. The targets presented are those mentioned in laws, policies, and strategies at the country and state level when applicable.

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¹ Excluding India which had submitted its prior NDC in 2016.

² As of 16 October 2022, Eritrea had not ratified the Paris Agreement but had submitted an NDC.

³ These countries revised their emission targets upwards compared to targets submitted previously.

⁴ Note that 22 Parties define targets in terms of both capacity/output and share of the power mix.

⁵ A collaboration between four organisations – The Energy & Climate Intelligence Unit (ECIU), the Data-Driven EnviroLab (DDL), the NewClimate Institute and Oxford Net Zero – funded by the European Climate Foundation (ECF), ClimateWorks Foundation and the IKEA Foundation.

⁶ Net zero is a state where a balance between anthropogenic GHG emissions and removals is achieved. This can be achieved through reducing and avoiding emissions, and then implementing solutions to capture the remaining ones at the point of generation, or by removing them from the atmosphere. Climate neutrality – synonymous to net zero – means achieving a balance between emissions and removals of GHGs from the atmosphere. Carbon neutrality describes a state in which the GHG emissions released to the atmosphere by a stakeholder (individual, organization, company, country, etc.) have been reduced or avoided and the remaining ones are compensated with carbon credits. Source: (UNFCCC, 2022). Zero carbon - Zero carbon means that no carbon emissions are being produced from a product or service. It concerns the emissions produced from a product or service – it means no carbon is given off at all. Source: (National Grid ESO, n.d.).

⁷ Some examples of Scope 3 activities are extraction and production of purchased materials; transport of purchased fuels; and use of sold products and services (WBCSD and WRI, n.d.).

⁸ IRENA analysis encompasses all national-level targets for renewable power generation as per the country’s national laws, official strategies and plans. Targets in NDCs are considered separately as these can often be conditional or non-binding.

⁹ Eritrea, Eswatini, Guinea, Guinea-Bissau, Namibia, Niger and Rwanda.

¹⁰ Cabo Verde, Cook Islands, Mauritius, Samoa, Sao Tome and Principe, and Solomon Islands.

¹¹ Belize, Bolivia, Chile, Nicaragua, Panama and Peru.

¹² Although bioenergy brings many benefits, it can also cause negative environmental, economic and social impacts such as loss of biodiversity, deforestation and reduced food security. A robust policy framework is needed to minimise the potential negative impacts. IRENA’s report, Bioenergy for the Transition: Ensuring Sustainability and Overcoming Barriers, studies potential sustainability aspects and analyses the elements of the policy framework required, including setting sustainability-based targets and long-term plans; ensuring sustainability governance supported by regulations, certification schemes and cross-sector coordination; and integrating bioenergy policymaking with the Sustainable Development Goals (IRENA, 2022c).

¹³ Although the report focuses on renewable energy targets, targets for improved and more efficient cookstoves are also included as these are widely adopted to support clean cooking goals.

¹⁴ Namely hydrogen produced using only renewable energy. While many production pathways may exist, for the sake of this report green hydrogen refers to hydrogen produced by renewables-fuelled electrolysis.

¹⁵ While these targets are often limited to “municipal operations”, some cities are also applying them city-wide.

¹⁶ It is important to note that not all renewable power capacity added globally is “driven” by renewable energy targets, strictly speaking. A lot of renewable capacity is simply being added by households, small and mediumsized enterprises and industries for self-consumption (on-site use), while other capacity is being built to respond to market demand (rather than in response to government-set targets), such as the investments occurring under corporate power purchase agreements. Also, jurisdictions like the US state of Texas have not revised their renewable energy target since having far surpassed it 2010, as investment is occurring even in the absence of mandatory targets due in part to increasingly low-cost renewables.

¹⁷ As this is a pledge at this stage and has yet to be translated into national policy documents, this estimate was not included in the analysis.

¹⁸ Several countries included targets/commitments as part of their NDCs that are conditional on receiving international climate finance to plug the incremental cost gap. Many such pledges remain non-binding due to limited international climate finance flows.

¹⁹ Mismatches can be found in both directions, i.e. cases in which NDCs are more ambitious than national plans and cases in which NDCs are less ambitious than national plans.

²⁰ In many cases, the temporal lag exceeds five years.

²¹ The development of Long-Term Low Emissions Development Strategies (LT-LEDS) also presents an opportunity for countries to build their NDC ambitions into long-term planning.

²² Although it should be noted that some countries also rely on carbon capture technologies.

²³ Opting out of fossil fuel-based energy and systems refers to a country with growing energy demand that has decided to stop adding further fossil fuel sources of energy, and instead to add renewables. This has the effect of gradually reducing the fossil fuel-based share of the energy mix.

²⁴ In the power sector, the fuels used in thermal power plants (oil, coal, oil, fossil gas or biomass) can be measured easily. However, for non-thermal electricity generation (e.g. hydropower, nuclear or wind facilities), the input of fuels, or primary energy equivalent, must be calculated using assumptions that can result in distortions between fuels. For example, under the physical energy content method, while the efficiency of nuclear power plants is estimated to be 33%, that of hydropower plants is estimated to be 100%. As such, 1 GWh of electricity generated would be associated with a primary energy equivalent of 3 GWh for nuclear and only 1 GWh for hydropower.

²⁵ China’s non-fossil fuel capacity includes nuclear power. China had a total installed capacity of about 55 GW of nuclear power at the end of 2021 with plans to expand to 70 GW by 2025, and between 120 GW to 150 GW in 2030 (Nikkei Asia, 2022).

²⁶ It is worth noting that it is more common for such programmes (which generally also come with a budget) to have specific targets, which are different to policies and strategies with targets.

²⁷ Unless this information is available in official policy documents of the country being analysed.