Countdown to COP28: What does wind need?

• The United Nations COP28 conference is due to start in November
• This includes a focus on $7trn subsidies paid to fossil fuel firms in 2022
• COP28 will also include the first 'global stocktake' country analysis

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In November, political and business leaders from around the world will gather in Dubai for the United Nations’ COP28 climate conference. This ‘debate in the desert’ is set to focus on how to limit global warming to 1.5 degrees Celsius below pre-industrial levels.

This could be positive for onshore and offshore wind. COP28 usually galvanises firms to make pledges to boost sustainability, where wind can play a part, and governments will face calls to commit to supportive policies too. For example, Brazil’s Congress is under pressure to ratify climate-related legislation before COP28, including support for offshore wind. We will hear plenty of announcements in sectors including power-to-X.

And yet, we don’t want to get too excited about COP28 for now given the huge issues that still loom large for the global transition to low-carbon energy sources.

Let’s consider the vast subsidies still being paid to the oil, gas and coal sectors. The International Monetary Fund reported last week that, in 2022, subsidies paid globally for these three sectors were $7trn, which is the equivalent of 7% of world GDP. The IMF also warned that taking steps to reduce these subsidies is vital if we are to keep global warming to under 2 degrees Celsius, let alone 1.5 degrees.

Previous COP conferences have proved disappointing. It was a success that the final agreement from COP26 in Glasgow in 2021 included a commitment to cut fossil fuel subsidies. This was the first time such a pledge was included in a final COP deal. But there was also disappointment that the text was watered down late on to focus on phasing out “inefficient” fossil fuel subsidies, rather than all subsidies, and phase down “unabated” coal power, which excludes coal plants with carbon capture and storage.

The best the wind sector can hope for is that any COP28 deal strengthens the language around phasing out use of fossil fuels and associated subsidies; and commits to further rapid expansion of renewable energy sources. However, this is where the choice of oil and gas powerhouse Dubai as the location COP28 has attracted criticism.

Sultan Ahmed Al Jaber, COP28 president, said last month that “phasing down fossil fuels is inevitable and essential” – but scepticism abounds given that he is also group chief executive of Abu Dhabi National Oil Company (ADNOC). He has been criticised by campaigners for appearing to change the focus of the discussion from reducing the use of fossil fuels, to reducing the emissions from fossil fuels. Given that the oil and gas sectors will need to play a role in any action to curb global warming, he may yet prove to be an inspired choice as COP28 lead. We’ll reserve judgement for now.

Al Jaber also announced the plan for COP28 policy priorities last month, which included commitments to triple renewable energy capacity to 11,000GW globally by 2030; to stay focused on 1.5 degrees; and to double global hydrogen production to 180million tonnes annually by 2030. These would all be key policies if they can be delivered.

Global stocktake

Another major talking point at COP28 will be the ‘global stocktake’ process, which focuses on how much progress countries have made so far to deliver on the promises of the Paris deal of 2015. This is due every five years, and it is positive that countries should be held to account for what they have done and encouraged to improve.

However, research from Bloomberg New Energy Finance shows that the world is still falling well short of where it needs to be on renewable energy investment.

Last week, BNEF reported that investment in renewables globally rose 22% year-on-year to $358bn in the first six months of 2023. It said that was the highest of any six-month period it had analysed, but is far short of the $590bn that would need to be invested on average in each six-month period until 2030 to stay on track for net zero.

Its analysis highlighted specific challenges that are holding back investment in the onshore and offshore wind. Investment in solar increased 43% year-on-year to $239bn in the first six months of 2023, whereas total wind investment slipped 8% year-on-year to $94bn. Of that, onshore wind fell 21% to $64.5bn, which BNEF attributed to issues including grid constraints, permitting, and faltering policy support in key wind markets. This has led to fewer investable projects for investors to get involved with.

Ultimately, BNEF said $8.3trn needs to be invested in deploying renewables between 2023 and 2030 if the world is to stay on track for net-zero emissions. But that can only happen if politicians remove the obstacles that hold back developers and investors.

If the ‘global stocktake’ can present its findings in such stark terms, it could provide the reality check that many countries need. We remain hopeful.