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Nu’oman A. A

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State of Energy Policy 2024

The last four years unleashed a wave of new energy policies that addressed pressing energy security concerns and accelerated the uptake of clean energy. The global economic crunch triggered by the COVID19 pandemic prompted governments to launch new recovery and relief packages, with many prioritising clean energy transitions.

Close to 150 countries - covering close to 95% of global greenhouse gas (GHG) emissions set forth new, more ambitious climate commitments, leading about 50 governments to tighten energy efficiency, renewables and emissions standards alongside these new incentives for clean energy. Since 2020, clean energy investment grew 60% globally.

Energy security has prominently reemerged as a priority for policymakers. Russia’s invasion of Ukraine in 2022 led to energy price spikes globally, highlighting the risks posed to interconnected energy systems.

Countries were reminded a new of traditional energy security concerns, while the shift to clean energy brought forth new ones, particularly in terms of supply chain concentration of key technologies and the critical minerals essential to their production. Disruptions to trade routes amid growing geopolitical tensions and climate-induced extreme weather are complicating the situation, exposing energy systems to new vulnerabilities. More than ever, countries are having to consider and adopt new approaches to balance the interconnected goals of sustainability, affordability, competitiveness and security.

Government incentives for clean energy grew to unprecedented levels, and are now a major driver for rising clean energy investment. Since 2020, governments have earmarked almost USD 2 trillion in direct investment support for clean energy nearly triple the amount committed to clean energy in response to the 2007-08 financial crisis. Some 80% of this earmarked funding is concentrated in just three regions: China, the European Union and the United States.

Many measures are framed as efforts to boost clean technology deployment and to secure positions in emerging industries that promise to be major future sources of growth and employment. New spending measures continue to be approved. In the first half of 2024 alone, more than 40 countries earmarked clean energy support, totalling to USD 290 billion.

Securing clean energy supply chains has become a key priority, prompting use of diverse policy measures – from direct incentives to trade policy. Geographical concentrations within clean energy supply chains remains higher than fossil fuel supply. Across key technologies – solar PV, wind, battery, and electrolyser – at least 80% of manufacturing capacity is concentrated within the top three producing countries. This renders global supply chains vulnerable to disruptions, whether due to policy changes in individual countries, natural disasters, technical failures or corporate decisions.

#cleanEnergy #Renewables #ClimateAction #GreenEnergy #EV

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