Global clean energy investment is projected to hit $2 trillion in 2024, doubling the amount poured into fossil fuels, according to a new report by the International Energy Agency (IEA) on Thursday.
The Paris-based energy watchdog’s annual World Energy Investment report said that total energy investment worldwide is expected to exceed $3 trillion in 2024 for the first time.
Around $2 trillion of this amount is allocated for clean technologies such as renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements and heat pumps, the report said, adding that the remaining amount, slightly over $1 trillion, will be invested in coal, gas and oil.
Last year, combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time, according to the report.
The report also warns about “major imbalances and shortfalls in energy investment flows,” pointing to the low level of clean energy spending in emerging and developing economies, with the exception of China. India and Brazil are leading in investments in developing nations at an amount set to exceed $300 billion for the first time.
However, this accounts for only about 15% of global clean energy investment, far below what is required to meet growing energy demand in many of these countries, where the high cost of capital is holding back the development of new projects.
The report also highlights that solar energy is attracting the highest investment among all electricity generation technologies, with investments projected to reach $500 billion this year, spurred by falling module prices.
China is set to lead clean energy investment in 2024 with an estimated $675 billion, followed by Europe at $370 billion and the US at $315 billion, together accounting for over two-thirds of global investment, the report added.
According to the report, global upstream oil and gas investment is expected to increase by 7% in 2024 to reach $570 billion, following a similar rise in 2023. The growth in spending in 2023 and 2024 is predominantly down to national oil companies in the Middle East and Asia, it added.
Commenting on the report, IEA Director Fatih Birol said: “Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy.”
“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions, and by considerations of energy security,” Birol added.
“But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains,” he said. “More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr
