IRENA’s 18.4 TW renewable target highlights financing gaps in developing economies
Islamabad, Nov 15,2026: Achieving the global target of nearly 18.4 terawatts of renewable energy capacity by 2035 will require rapidly scaling grid investment, energy storage and affordable financing. However, developing economies face the steepest challenges in expanding their clean energy systems.
Under the 1.5°C Scenario outlined in the International Renewable Energy Agency’s (IRENA) World Energy Transition Outlook 2026, global renewable capacity would increase from 5,155 gigawatts (GW) in 2025 to 18,393 GW by 2035 and 38,232 GW by 2050.
Released in October, the report supports the COP30 Brazilian Presidency’s roadmap for transitioning away from fossil fuels. Meeting the 2035 target would require average net renewable capacity additions exceeding 1.3 terawatts (TW) annually between 2026 and 2035, driven primarily by solar and wind power.
IRENA Director-General Francesco La Camera warned that the global energy transition was under stress, emphasising that simply adding renewable energy to an unchanged energy system would not be sufficient. He stressed the importance of incorporating affordability, social protection and equitable access to economic opportunities into the transition to maintain public support.
The scale of the transformation reflects electricity’s growing role in the global economy. IRENA projects that electricity must account for 35% of global energy use by 2035, while annual investment in electricity grids would need to double to $1 trillion.
Energy storage capacity would also need to reach 2.5 TW by 2035 and 6.9 TW by 2050, highlighting the infrastructure requirements associated with integrating larger shares of renewable energy into power systems.
Although global renewable capacity increased by a record 692 GW in 2025, the expansion remained substantially below the annual pace required under IRENA’s proposed pathway.
Equipment costs are also presenting new challenges. Chinese solar module prices increased roughly 27% from approximately $0.09 per watt at the end of December 2025 to $0.114 per watt by mid-April 2026.
The increase came as Beijing cracked down on disorderly low-price competition among manufacturers. Markets dependent on imported solar panels remain particularly sensitive to such price movements.
The financing requirements extend well beyond renewable power generation.
IRENA estimates that total investment under its proposed energy transition pathway would exceed $256 trillion during 2026–2050, approximately $78 trillion more than current government plans imply.
The agency also cautions that high financing costs, currency risks and limited access to capital weigh most heavily on developing economies, potentially constraining their ability to expand renewable energy infrastructure at the required pace.
For countries such as Pakistan, the challenge extends beyond installing additional solar panels to financing the wider electricity system needed to support renewable energy integration.
Bilal Anwar, a global climate policy and climate finance adviser and former UNFCCC and Commonwealth official, told Wealth Pakistan that Pakistan’s rooftop solar growth had been remarkable, but expanding renewables across the broader power system faced significant financial constraints.
“International climate finance remains far below needs, leaving governments to make difficult choices between energy investment, disaster recovery and essential development spending,” he said.
Anwar emphasised that meeting such ambitious renewable energy targets across developing economies would require affordable, long-term financing for renewable generation, electricity grids and storage without worsening existing debt burdens.
Dinita Setyawati, a senior energy analyst at Ember, said developing countries with abundant renewable energy resources often faced their greatest challenges in areas where electricity grids were weakest.
She explained that expanding grid connections, developing energy storage and introducing flexible electricity demand could help address these constraints, while improved procurement arrangements and greater private-sector financing could ease financial pressures.
For Pakistan, Setyawati noted that the rapid expansion of rooftop solar had transformed many electricity consumers into producers, or prosumers, demonstrating the potential for wider renewable energy adoption.
However, replicating this success at the utility scale would require competitive power purchase agreement prices, supported by smart grids and adequate storage infrastructure.
“The real prize of this is clean electrification, shifting Asia’s energy systems from imported molecules to homegrown electrons,” she said.
The IRENA outlook highlights the importance of treating electricity grids, storage and financing as central components of the energy transition rather than secondary considerations.
For developing economies, achieving the proposed renewable energy expansion will depend on coordinated investment across generation, transmission and storage, alongside financial arrangements that make clean energy projects affordable and commercially viable.
If these challenges are addressed, greater renewable energy deployment could help import-dependent economies reduce their reliance on imported fuels, improve energy security and benefit from more affordable electricity over the longer term.
