A record $1.8 trillion pumped into clean energy in 2023 globally may still not be enough to meet the COP28 target of tripling renewables capacity by 2030, consulting firm EY said on Thursday.

Besides building assets to generate clean energy, the other challenge faced by companies is getting their projects hooked up to the electric grid, which is struggling to integrate new wind, solar and battery power.

WHY IT'S IMPORTANT

Growth in solar and wind power pushed renewable generation to a record 30% of global electricity production in 2023, up slightly from 29.4% in 2022.

Most of the addition came from China, a country EY sees as one of the leaders in renewable energy development, alongside the U.S. and Germany.

A report by the International Energy Agency earlier this month, however, showed that climate plans taken up by different countries, besides 14 of a total of 194 nations, are not yet in line to meet the target.

Investors face higher capital costs due to a steep interest rate environment. "The sector should prepare for two or three years (at least) of more constrained financing and raised expectations from investors," EY stated.

Battery energy storage systems could play a vital role in a more volatile grid, the report says. The deployment is forecast to quadruple to 572 gigawatts (GW) or 1,848 gigawatt-hours (GWh) by 2030, much of which would be adopted at grid-scale, it adds.

CONTEXT

More than 100 countries at the COP28 climate summit in Dubai last year had agreed to triple renewable energy capacity by 2030 and cut down the use of fossil fuel and emissions, a move seen as vital to avert the worst effects of climate change.

The pledge made at COP28 is one of the several energy-related announcements that include new measures and funding to combat methane emissions, agreements to cut coal use and nuclear energy promotion.

(Reporting by Seher Dareen in Bengaluru; Editing by Mohammed Safi Shamsi)