20210729-安永-A_clean_COVID-19_pandemic_recovery_the_global_opportunity_69页_5mb

Summary of "A Clean COVID-19 Recovery: The Global Opportunity"

Core Content

This report, prepared by EY-Parthenon and funded by the European Climate Foundation, highlights the potential of a green recovery focused on renewable energy to deliver significant benefits in terms of People, Planet, and Prosperity. Through bottom-up research across 47 countries, the report identifies 13,000 'shovel-ready' renewable energy projects that can be deployed in the next two to three years, offering a substantial opportunity to stimulate economic recovery and accelerate climate action.

Main Points

1. People

• The visible project pipeline can create up to 10 million jobs, both directly and indirectly.
• Jobs are created across the supply chain, with 90% coming from deploying the projects.
• Job creation is especially impactful in rural and non-urban areas, and can be further enhanced by local supply chain development.
• Skilled jobs in engineering and project management are also available.

2. Planet

• The visible project pipeline can contribute to 22% of the NDC emissions reduction targets for 2030 across the 47 countries.
• It could also help close 9% of the global 1.5°C emissions target.
• Accelerating renewable deployment can drive broader decarbonisation through electrification of other sectors such as transport and industry.

3. Prosperity

• The pipeline presents a $2tn investment opportunity, which is ~85% of the GDP loss in 2020 due to the pandemic.
• Private sector investment can cover 90% or more of the required capital, significantly multiplying the effect of government spending.
• The pipeline includes transformational infrastructure projects that can enhance energy security and grid resilience.

Key Investment Opportunities

• The 13,000 projects can add 1TW of renewable generation capacity.
• Onshore wind, offshore wind, solar PV, and hydro are the primary technologies contributing to this scale of investment.
• The LCOE (Levelized Cost of Energy) for offshore wind is expected to reduce by 47%, while solar PV and onshore wind will see reductions of 8% and 4%, respectively, due to the deployment of these projects.

Policy Enablers for Accelerating Deployment

To unlock the potential of the pipeline, the report outlines six key policy enablers:

1. National Ambition and Targets

   • Clear and ambitious national targets for different renewable technologies.
   • Example: UK's offshore wind agenda over the next 10 years.

2. Supporting Policy and Market Framework

   • A regulatory environment that reduces uncertainty and supports cost reduction.
   • Example: Renewable energy auctions and sector deals.

3. Availability of Domestic Capital

   • Access to funding through domestic financial institutions and low-interest loans.
   • Example: Capital made available for all developers, not just state-owned entities.

4. Availability of International Capital

   • Support from international financial institutions.
   • Example: Access to capital for all developers, not just state-owned entities.

5. Land Allocation and Permitting

   • A streamlined process for identifying suitable and accessible land.
   • Example: Proximity to grid points and minimal bureaucratic hurdles.

6. Transmission Infrastructure

   • Expansion of both domestic and cross-border interconnection to support renewable integration.
   • Example: Liberalised regulation to allow private providers to connect to the grid.

Success Stories

• UK's Contracts for Difference (CfD) Scheme:

  • Launched in 2015, the scheme has supported 12GW of renewable capacity through 3 auction rounds.
  • £50bn in private investment has been generated, with £540m in government budget.
  • The scheme has been replicated in Poland and Italy, showing its effectiveness.

• Argentina's RenovAr Programme:

  • Launched in 2016, it has enabled $7bn in private investment for 5GW of new capacity.
  • The government's estimated cost is $0.8bn, and the programme has reduced energy subsidies by ~66%.

• Vietnam's Rooftop Solar Growth:

  • Installed capacity increased by 2,435% from 2019 to 2020, surpassing the visible pipeline by ~100%.
  • The success was driven by a feed-in-tariff scheme.

Conclusion

A green recovery, focused on renewable energy, presents a no-regrets opportunity to create jobs, boost prosperity, and advance climate goals. The 13,000 projects identified offer a realistic and achievable investment pipeline that can mitigate economic losses from the pandemic and accelerate the transition to a low-carbon economy. With the right policy enablers, the potential of this pipeline can be rapidly unlocked, supporting both local job creation and global climate action.