Q: Where would you like to see more investment in green energy?
A: For modernisation and poverty reduction to take place in any low-income country you need access to modern energy carriers. Billions of people are [living in energy poverty]. If access to renewable energy is not there, these countries will follow the path of the rest of the world and probably use coal, oil and gas. Investing in coal, oil and gas locks you in for decades because of the nature of the investments. The world cannot afford more fossil fuel investments.
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If you look at 2017, investment in renewables in developing countries was in the range of $170bn. Out of that, $130bn was in China, another $10bn was in Brazil and another $6bn or $7bn for India. That leaves little more than $20bn for the rest of the developing world. For many low-income countries, renewable energy investments are looked upon as being risky, so investors need guarantees. The World Bank, regional development banks and aid agencies need to increase their investment guarantee programmes. Regional development banks need to give a higher priority in general to energy. There has been this notion that the private sector will take care of everything related to energy. That is wrong, not least among the poorer parts of the population.
Q: Is the growth in green energy investment happening quickly enough?
A: If you look at the world at large, fossil fuels make up 80% of energy emissions today. That has been the case for the past 40 to 50 years. I started energy policymaking in the 1970s, and the ratio was 84%, and now it is about 80%, so regrettably it is a slow process. The traditional fossil fuel industries have a tremendous dominance, and in many contexts they are still looked upon as more secure. Also until very recently the price differential with renewables was quite large. Then of course you have storage problems; the sun doesn’t always shine and the wind doesn’t always blow. If carbon taxes had been higher we would have seen more investment in renewables. I also think the shale revolution provided a lot of relatively cheap gas, which is then being exported around the world.
Q: Is solar energy the silver bullet?
A: The cost of solar panels has been reduced by 29% yearly for the past 10 years. All the expectations early on about the role of solar energy were totally wrong. We had a much more rapid expansion. One of the reasons is, of course, that costs have gone down so much faster [than we thought]. Even if the total level of investment, in terms of billions of dollars, has not gone up in the past four to five years in annual figures, we will still have much more capacity coming forth because of lower prices. If we were to continue to expand solar investments just as we have in the past 10 years, solar energy will take over the world in 2040.
Q: However, there are still big problems with renewable energy storage.
A: Yes, but there is progress, not least with regard to demand-side management. But what the future battery will look like, and what materials will be used, is an open question. Can we continue to depend on cobalt and lithium, which are quite rare and rely on deposits limited to a few countries? This is why effective recycling technologies have to be developed with urgency.