The Climate Investment Funds (CIF) intend to ramp up its Global Energy Storage Program to support energy transition and system flexibility in developing countries from its initial contribution of $250 million to a $1 billion program with additional contributions.
The $8.3-billion CIF is the largest multilateral climate-financing instrument in the world providing developing countries with financing for climate-resilient and low-carbon development.
These grants, concessional loans, risk mitigation instruments, and equity leverage significant financing from the private sector, multilateral development banks (MDBs), and other sources. Five MDBs—the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG)—implement CIF-funded projects and programs.
In a recent interview with Anadolu Agency, Mafalda Duarte, the head of CIF, said in recognition of the global climate change problem, countries need to create more nationally distributed contributions (NDC) to reach targets set in the Paris Climate Agreement.
In 2015, government representatives from 197 countries met in Paris and agreed to limit the global temperature rise by the end of the century to well below 2°C and to pursue efforts to limit the temperature increase even further to 1.5°C. In the four years since the historic meeting and 24 years after the first Conference of the Parties (COP) in 1995, progress on climate action has been limited at best.
“Global greenhouse gas emissions continued to increase by 1.5% per year in the past decade, with no signs of peaking. A reduction of approximately 5% per annum is needed to limit global warming to 1.5°C. Government commitments so far are far from sufficient," the World Economic Forum (WEF) said in its latest published report entitled The Net-Zero Challenge: Global Climate Action at a Crossroads.
The report showed that only 67 countries – among them none of the top five emitters – have committed to the goal of achieving net-zero carbon dioxide emissions and even most countries with this commitment have not enacted sufficiently robust policies to attain the emission reductions required.
"The world is at a crossroads. The coming decade will decide whether humanity can achieve the goal of limiting warming to 1.5°C. Without a meaningful reduction in emissions in the next five years, the ability to act will increasingly be lost, resulting in damage that could become irreversible," the WEF warned.
Duarte said renewable energy is key in terms of realizing climate action targets. However, she added even though renewable energy capacity quadrupled over the past decade, it is still not enough.
The International Renewable Energy Agency (IRENA) calculates that global investment in renewable energy agency capacity was $329 billion per annum between 2009 and 2018. IRENA estimates the average investment volume will reach $737 billion per year up to 2030 when it will create a cumulative $10.3 trillion.
"Because we have population growth and more than 800 million people without energy access, what we have managed is almost meeting additional demand with renewable energy but we still have a big chunk of energy from fossil fuels," she noted.
- Batteries to support grid flexibility
According to Duarte, storage systems are necessary to support the grid in the event of problems from growing renewable energy capacity.
"We just launched a Global Energy Storage Program [GESP] to support energy storage solutions in two ways. One of which is to provide flexibility that energy systems require with renewable energy generation. The second is to support mini grid and decentralized solutions," she explained.
She said the CIF aims to enable the use of storage solutions that are critical for energy transition in developing countries.
GESP is the world's largest multilateral investment program for scaling up energy storage systems in developing countries. With the capital envisaged, the initiative seeks to triple energy storage capacity in developing countries, mobilizing up to $8 in partner financing for every dollar invested in energy management systems, policy enhancements, technical assistance, and knowledge sharing.
This type of financing is expected to support approximately 17.5 gigawatt-hours (GWh) of new energy storage capacity by 2025 and broaden energy access for 6.5 million people, according to the CIF’s website.
According to IRENA's data, the batteries are set to reach up to 180 gigawatt-hours (GWh) of installed capacity by 2030.
- Turkey should maintain its energy transition
In light of Turkey’s growing renewable capacity, which Duarte described as “good news”, the county is eligible to benefit from GESP .
“We will be reaching out to Turkey asking if they are interested in these programs. We have put $450 million and $4.3 billion of additional financing from our own resources in renewable energy and energy efficiency investments in Turkey," she said.
Duarte explained that thanks to the CIF's direct and indirect investments in Turkey, 1.4 gigawatts (GW) of installed renewable energy capacity has been built saving 16 GWh of energy.
The investments ensured the reduction of 30 million tons of CO2, she said.
"It is this type of support that is needed in countries like Turkey and others to make their energy transition. We agree that Turkey should continue to make this transition," she concluded.
By Nuran Erkul Kaya