While many of the barriers and the opposition to renewable energy adoption have been removed at government levels around the world, the financing of schemes remains the main roadblock to much wider adoption, according to an industry expert.

Speaking ahead of the World Green Economy Summit set to be held in Dubai on Tuesday and Wednesday, Matthew Kennedy, the head of the International Energy Research Centre, said major global events such as the Paris Agreement at COP21 in December 2015 and the United Nation's adoption of Sustainable Development Goals in January 2016 have led to "a change within the whole energy system" and government recognition about the need to move towards decarbonisation.

However, Kennedy, who previously led the UN's Climate Technology Centre and Network in Copenhagen and led technology discussions for the UN at the COP21 negotiations, said that some barriers remain, especially in terms of planning and local objections to installations such as wind farms.

Also, he said that many countries are committed to long-term supply deals where fossil fuel purchases have been subsidised, meaning that renewables do not compete on a level playing field.

"But because policymakers have determined that their future pathway was renewables, or decarbonisation, then a lot of those policy barriers can be overcome," he told Zawya in an interview conducted last week via Skype.

"What still exists, really are the barriers about finance. For a financier to invest in renewables, the project itself needs to be bankable, which means that a lot of it is about the parity of the price and the performance of the renewable technology versus existing ones."

Kennedy, who is set to moderate a panel on "the next generation of clean energy solutions", says that governments need to do more than just cut subsidies for fossil fuel schemes and look to make a real difference by offering tax breaks or incentives, such as low-interest loans, for research and development into renewable technologies.

"You need a market mechanism that can enable the developer to gain profit from deploying renewables. That type of financing infrastructure is a key role for government."

Dubai green fund

The Dubai government is set to announce the first investments that will be made under the 100 billion UAE dirham Dubai Green Fund ($27 billion) at the World Green Economy Summit, Dewa's chairman Saeed Al Tayer told a press conference previewing this year's event on Thursday.

"Green loans for the deployment of larger-scale infrastructure, green bonds, the development of efficient supply chains, anywhere that government can put together incentives that can stimulate the development of new business models for industry to deploy is extremely important," Kennedy said.

He said that although the global market for green bonds had been slow-starting, "now there is more confidence" in the market. According to the Climate Bonds Initiative, just $2.6 billion of green bonds was issued in 2012, but this figure has already grown to over $200 billion this year.

"That has taken a little learning from the financiers and the policymakers, but now there is more confidence in a green or climate finance bond being deployed," Kennedy said.

Yousuf Al Ali, director of business growth at Masdar, who will also appear on the same panel debate as Kennedy, said that the financing arrangements were crucial to renewables projects getting off the ground.

Abu Dhabi-based Masdar currently has projects around the world capable of generating 2.8 gigawatts (GW) of power either completed or under development, the organisation said in a press release issued on Monday.

"In all of our projects, we work with international partners so we always go for a healthy business case," Al Ali said in a telephone interview with Zawya on Monday. "Before going for any project, we need to ensure that we have a healthy business case and good financials that can be delivered to our stakeholders.

"In all of these projects, we have partners that have long experience and share with Masdar the risks and rewards.”

He said that Masdar, which is owned by Abu Dhabi's state-owned investment firm Mubadala, has partnered with a range of entities on major projects, such as with French energy giant EDF for the 800MW third phase of the Mohammed Bin Rashid Solar Park in Dubai, and with Norway's Statoil on the world's first floating wind farm, which opened off the North East coast of Scotland last week.

© ZAWYA 2017