Big institutional investors such as pension and sovereign wealth funds, as well as corporate clean energy buyers must come on board to drive the investment levels needed to stave off catastrophic global heating, according to a report by the International Renewable Energy Agency (IRENA).

The Global Landscape of Renewable Energy Finance 2020 study published yesterday states institutional investors sitting on an estimated $87 trillion of global assets supplied only 2% of investment for renewables in 2017 and 2018.

Although corporate entities signing renewable energy offtaker contracts made up 6% of the financial support for clean power during those two years, IRENA said company policies currently commit to buying only 3.8 PWh of clean power in 2050 when 21.3 PWh of corporate electricity demand must be met from renewables to keep global heating below 2 degrees Celsius.

Limitation

The publication, the second edition of IRENA’s renewable energy investment study, is hampered by the fact it is largely backward looking as it mainly considers the financial outlays made in 2013-18, and a section devoted to the potential impact of the Covid-19 crisis on investment does little to address the drawback. Nevertheless, the study makes a series of recommendations on the actions required to hoist the annual level of investment in clean power from an average of $300 billion in 2013-18 to the $800 billion per year required by mid century to hit the goals of the Paris climate change agreement.

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