Renewables and Fossil Fuel Phase-out – Opportunities, Shortcomings, Regulatory and Legislative Next Steps
The Global Renewables Congress (GRC) and the Climate Vulnerable Forum (CVF) hosted a first joint virtual policy dialogue on “Renewables and Fossil Fuel Phase-out – Opportunities, Shortcomings, Regulatory and Legislative Next Steps” on Wednesday 24th of March 2021.
The COVID19 pandemic has extensive effects on governments and people across the globe by overwhelming systems and exacerbating the livelihoods of those most vulnerable. It has led to destabilised financial markets and debt crisis, causing major disruptions in economic activity. As countries rebuild their economies, communities continue to grapple with the pandemic. At the same time however, many countries are proposing to build back greener, including the promotion of renewables or plans to phase out expensive and volatile coal.
GRC Chair Bärbel Höhn, former MP of the German Bundestag and acting Commissioner for Energy Reform in Africa, opened the dialogue by sharing her work as a former member of the German Parliament and as an Environmental Minister in the German coal-state of North Rhine-Westphalia. Mrs Höhn reiterated the role of Sustainable Development Goal 7 – “Ensure access to affordable, reliable, sustainable and modern energy for all” as not only one of the most important goals but also instrumental to achieving 2/3 of the SDGs towards greater sustainable development, as well as the importance of a just transition away from coal.
H.E. Tosi Mpanu-Mpanu, CVF Thematic Ambassador for Renewable Energy reaffirmed the role of renewables as a critical enabler of economic development and good health through effective irrigation, farming, and community resilience. Renewable energy must be part of building back stronger through better job opportunities as well as building a more resilient and low carbon economy.
Through recovery measures governments could recalibrate markets, technology, and finance towards more resilient and sustainable economic futures. Moving away from the technologies of the fossil past and striving towards accelerated climate action through the installation of renewable energy and a modernised power sector will be important if we are to safeguard development progress and economic growth prospects. Further, the use of renewables instead of excessive reliance on imported coal, gas, oil could lead to an avoidance of volatility in ongoing foreign currency and commodity price risks. To avoid a fossil fuel lock-in, the power sector needs improved governance, policies to reduce costs, improved resilience and increased optionality with modernised technology options. Both, coal and LNG lifecycles of 25 to 40 years are in stark conflict with the arc of new technology development. Due to their price volatility, unsustainability and other factors, fossil fuels will eventually become strandes assets. Therefore, they do not contribute to a drain in a country’s financial reserve, but are also source of financial vulnerability, stated Sara Jane Ahmed, V20 Finance Advisor.
Grid modernisation presents a key opportunity to allow for ramping products, fast frequency response by batteries, as well as for new market participants to provide ancillary services. Transmission planning is a key control lever that governments can use to influence the grid’s capacity to prioritise domestic renewable energy resources. To achieve a prospering energy transition, however, political will and enabling frameworks are needed. These also include quality standards, training of the local population, and long-term sustainable development solutions to create efficient operating and maintenance models.
In her High-Level keynote address, H.E. Loren Legarda, Deputy Speaker of the House of Representatives of the Philippines, CVF Ambassador for Parliaments and Member of the GRC, underlined that legislators must ensure that laws and legislations also respond to and reflect the people’s needs down to the last mile of the communities. Key to the success of the energy transition is the development of successful finance models. There needs to be a menu of financial tools to enable this transition such as the V20’s Accelerated Financing Mechanism to buy down the cost of capital for renewable energy thus improving the project economics. Other examples include crowdfunding options to accelerate the transition through cooperative financing models while also empowering people to take part in the transition itself. This can only be achieved through shared leadership, often through cross-party cooperation and a shared vision to realise 100% renewable energies for all.
With the Climate Prosperity Plans (CPP) initiative, the CVF and V20 support the goals of the Paris Agreement and Agenda 2030 to to build forward stronger by charting a decade of robust socio-economic development that fully integrates renewable energy and grid modernisation. The CPPs aim to drive awareness on maximised economic growth and coreresponding socio-economic outcomes by optimising prosperity and partnerships. There is significant opportunities for major economies to strengthen economic partnerships in the form of climate-centered investment and trade including technology transfer and innovation partnerships for a modernised power grid and other resilient and quality infrastructure.
At this virtual policy dialogue, participating legislators exchanged experiences and discussed the opportunities and challenges posed by a clean and renewable energy transition as well as the required next steps in building the regulatory and policy framework to safeguard a welcoming environment for a future that is sustainable, resilient and inclusive. H.E. Paola Vega, Costa Rican MP and Member of the GRC shared her experiences from Costa Rica with regard to the forerunner role of the country in terms of renewable electricity generation, struggles with conservative powers on lifting the moratorium on fossil exploitation and the necessity of an energy transition in the transport sector.
Finally, Anna Skowron, Policy Advisor to the GRC, introduced the findings of the GRC’s recently published series of analyses on the role of renewables in the post-COVID recovery efforts, presenting best practices. Combining COVID19 recovery efforts with strong measures towards climate action, resilience and sustainable development is key to avoid even more dire consequences of dangerous, man-made climate change. It is key to fast-track the energy transition as a key contributor to economic prosperity that leaves no one behind.