It would be big news for any country to invest $50 billion in renewable energy to generate 10 gigawatts of wind and solar power by 2023. However, when the nation concerned is Saudi Arabia – the Gulf State that possesses nearly one fifth of the planet’s proven reserves of petroleum and ranks as the largest global exporter – the story takes on another dimension.
It should not, though, come as such a surprise. In the era of the grand energy transition, we have entered a world where renewable is now the new normal and, to some extent, we have Paris to thank for that.
Much has happened since 195 countries adopted the first universal, legally binding climate deal to limit global warming below 2C, as signatories to the COP21 Paris Agreement, 2015. The normalising effects are far reaching, says Michael Liebreich, founder of Bloomberg New Energy Finance.
“Perhaps the biggest impact of the Paris Agreement is that the shift to a low-carbon economy is now seen as inevitable over some extended timeframe, not pie in the sky,” he says.
“So now, completely mainstream investors are asking companies about climate risk and stranded fossil assets. And in industry after industry, right through the supply chain, it is clear a lower environmental or climate impact can be a source of competitive advantage, driving a surge of innovation.”