Key decarbonisation solutions—including large-scale renewable development, electrification of end-uses, circular in nature, green hydrogen uses in hard-to-abate sectors and energy efficiency improvements—are highly capital intensive and require significant investment. Yet funding levels remain below what’s needed to meet 2050 net-zero goals.
Finance can fuel and power a just energy transition, but the race to achieve net-zero Greenhouse gas emissions by 2050 will require an annual global investment in the energy sector ranging from US$5 trillion to more than US$7 trillion —yet less than US$2 trillion is currently being invested on a yearly basis.
Deloitte’s economic analysis goes beyond finance to provide a holistic overview, employing analysis and modelling to consider the technology landscape, policy environment and a matrixed vision of financing issues, identifying and detailing what is urgently needed to allow capital to flow, how finance can fuel innovation and power a just energy transition.
Financing structures can add significant extra cost to green investments based on risks from political, market and transformation barriers for a specific geography and project.
An ecosystem is required to forge the path of a just, cost-efficient and successful transition - local and national governments and regulators can reduce the risks that threaten the bankability of green and sustainable investments, concessional investors can maximise the potential of blended finance to mobilise private capital and societies and investors can deal with huge upfront investments today, reaping the benefits later.