Policy responses to geopolitical events as well as global commitments to renewable energy have led to an increase in investment and use of renewables in 2023, according to a report published this month.

The Renewables Global Status Report (GSR) notes that commitments made at COP28 last year, which saw countries for the first-time agree on the need to transition away from fossil fuel to renewables, has led to a greater momentum to renewable energy. 130 countries committed to tripling renewable energy capacity and doubling the annual rate of energy efficiency improvements by 2030.

While the renewables sector continues to face some major challenges due to supply chain issues caused by geopolitical events in Europe and the Middle East, as well as a high interest environment, there remain a plethora of opportunities.

Global investment in renewable power and fuels increased by 8% in 2023 to $622.5 billion; representing a new global high despite the challenges faced by the sector.

2022 also saw employment in the sector grow by 8% to reach 13.7 million jobs. Similarly, the number of people lacking electricity access globally fell by 11 million from 2022 to 2023.

The world’s total final energy consumption (TFEC) grew by 5% in 2022, and renewables accounted for 13% of this global TFEC.

Energy security goals and industrial strategies are helping to boost renewable energy investments, and countries are consistently updating their renewable energy policies and targets. This in turn will encourage greater renewables uptake in heavy industry.

151 countries had net zero targets in place in 2023, while 90 had established renewable energy targets according to the report.

However, the cost of financing such capital-intensive projects is becoming harder globally. The rising costs of renewable projects is particularly concerning for emerging markets. There is a clear need for both enhanced short-term liquidity mechanisms and long-term sustainable development funding, notes the GSR report.

“Recent environmental initiatives launched in Libya over the course of the last few months, including the National Strategy for Renewable Energies and Energy Efficiency 2023-2025 demonstrate Libya’s commitment to the renewables sector,” says Tarek Eltumi, founding partner at Eltumi Partners. “While there are clearly challenges ahead for the sector globally, we are encouraged by the opportunities. We welcome the findings of this important report on the state of the global renewables market and are well placed to advise businesses looking to operate in it.”