IRENA calls for massive increase in clean energy investment in order to meet global ‘Net Zero’ emissions targets

During June, the International Renewable Energy Agency (IRENA, which is an intergovernmental organisation focused on renewable energy) estimated that the world will need to deploy renewable energy generation capacity at a rate of c.840GW/year (relative to the run-rate of c.200GW) to meet global ‘Net Zero’ emissions targets. Globally, this translates to average annual investment in clean energy of c.US$4 Trillion per year until 2050. Putting this number in context, this is more than the annual GDP of Germany (the world’s fourth largest economy) prior to COVID-19.

This estimate from one of the world’s specialist industry bodies provides more validation of the magnitude of investment coming into clean energy and underscores our view that this is a secular trend with generational significance. Despite equity markets as a whole posting new all-time highs and evidence of some froth in some sections of the market, this opportunity is not priced into valuations in our focus area and is being totally underestimated.