Global Solar Alliance Sets $1 Trillion Investment Goal For 2030

The Paris COP21 climate summit is turning out to be quite effective as several major agreements and initiatives have been announced in the past few days. Among them was the pledging of around $20 billion in clean energy funding by 19 countries that included the United States, China, Brazil, Canada, South Africa, UK and others.

 
 

Another major development included the creation of a Breakthrough Energy Coalition – a vehicle for investing in clean energy projects backed by billionaires Bill Gates and Mark Zuckerberg. In short, all these developments point towards the rising relevance of renewables especially solar power.

 
 

Yet another major catalyst that could have a long term impact on global renewable energy investments: India’s Prime Minister Narendra Modi, along with the French President Francois Hollande, launched a ‘Global Solar Alliance’ that consists of 120 nations most of them tropical countries (who receive abundant sunlight throughout the year) but also from European countries, the U.S. and China.

 
 

“The solar alliance we are setting up today is an alliance of countries that want to seize the abundant resource of sun energy. It is a partnership of states with private stakeholders from around the world,” said French President Hollande.

 
 

What this solar alliance will specifically do?

 
 

The new solar alliance would have its headquarters near New Delhi for which the Indian government would be investing close to $30 million. This headquarter will work towards raising close to $400 million through membership fees and its collaboration with other international agencies and institutes. This initiative could be a ‘game changer’ for the global solar energy sector as no less than 120 nations have joined forces to combat climate change. Members of the alliance commit to specifically work towards expanding the market for solar energy, reduce the cost of financing, and reduce the overall cost of solar technology. The members of the new solar alliance would ‘push’ for new solar projects globally with an aim of ultimately mobilizing around $1 trillion of solar energy funds by 2030.

 
 

As the solar energy market can only be expanded through new investments, India (which is spearheading the alliance) has already set a target of installing close to 175 GW of renewable by the year 2020 where solar energy would contribute close to 100 GW. That is an ambitious target considering the fact that India’s current installed capacity is just 4 GW. In the UAE, the Dubai government has announced a $27 billion program, requiring every building in the city state to have a solar panel by 2030.

 
 

Related: Saudi Cash Crisis Intensifies As Interbank Rates Soar

 
 

“Solar technology is evolving, costs are coming down and grid connectivity is improving. The dream of universal access to clean energy is becoming more real. This will be the foundation of the new economy of the new century,” said the Indian Prime Minister Narendra Modi who also called the formation of this new alliance as his ‘long cherished dream’.

 
 

The biggest strength of the new solar alliance is that it brings the developing and developed countries, industries, laboratories and institutions under a common umbrella. “With the U.S. and China joining India, along with over 100 other nations, to support this solar alliance on the first day of the U.N. climate negotiations, the majority of greenhouse gas emitters are demonstrating tremendous leadership to develop sustainably while curbing climate change,” said China Program Director for the Natural Resource Defence Council, Jing Jing Qian.

 
 

Conclusion

 
 

What sets this initiative apart from others is that it involves the participation of both governments (120 nations) and the private sector. Engie, Enel, HSBC France, Areva and Tata Steel are examples of this. It is likely that more players from the private sector will join this alliance. Now the seed has been planted, the alliance will receive the full support of governments of developing countries, along with their respective private sectors. Putting all the pieces together, the initiative could accelerate the adoption of solar power.

 
 

By Gaurav Agnihotri of Oilprice.com

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