Global energy investment is expected to reach a record $3.3 trillion this year, with two-thirds of the total directed toward clean energy technologies, according to the International Energy Agency's (IEA) latest World Energy Investment report on Thursday.
Despite ongoing geopolitical tensions and economic uncertainty, global energy spending is projected to rise 2% compared to 2024.
Of the total investment, $2.2 trillion will go toward renewables, nuclear power, grids, storage, low-emission fuels, efficiency, and electrification. The remaining $1.1 trillion will go to oil, natural gas and coal.
The IEA highlights that this surge in clean energy investment not only reflects growing efforts to reduce emissions but also the increasing influence of industrial policy, energy security concerns, and the rising cost competitiveness of electricity-based solutions.
Ten years ago, fossil fuel investments exceeded spending on electricity infrastructure by 30%.
This year, investments in electricity including generation, grids, and storage are expected to be 50% higher than those for oil, gas, and coal combined.
Investment trends are being shaped by the onset of the "Age of Electricity", the IEA notes.
- Solar leads as top investment choice
Solar energy remains the largest recipient of clean energy funds, attracting $450 billion in investment nearly double the amount five years ago.
Nuclear power investment is expected to grow by 50% over the same period and is set to exceed $70 billion.
Grid infrastructure investment is expected to reach $400 billion, lagging behind production and electrification spending.
The IEA warns this gap poses risks to electricity security, urging grid investments to match generation levels by the early 2030s.
However, investment in grids is struggling to keep pace with the rise in power demand and renewables deployment.
- Coal investments on rise, while oil experiences decline
China, the world's largest energy investor, has increased its share of global spending from 25% to 33% over the past decade.
This growth spans a wide range of technologies, from solar and wind to nuclear and electric vehicles.
China and India continue to boost coal capacity. China began construction on around 100 gigawatts of new coal plants last year, with newly approved capacity reaching its highest level since 2015.
Coal investment is expected to rise by 4% in 2025.
Conversely, oil investment is projected to fall by 6% the first decline since the pandemic mainly due to falling prices and softer demand, particularly in the US.
- China's energy spending matches EU and US combined
IEA Executive Director Fatih Birol noted that geopolitical and economic uncertainties are prompting countries and companies to shield themselves from various risks.
"Energy security is a major driver of the record $3.3 trillion in investment this year," Birol said.
"While the shifting economic and trade landscape has caused some investors to adopt a wait-and-see approach, most existing projects remain largely unaffected," he added.
Reflecting on the evolution since the first World Energy Investment report in 2015, Birol said, "Back then, China had just overtaken the US in energy investment. Today, China is by far the world's largest energy investor, spending nearly as much as the EU and US combined."
Reporting by Nuran Erkul in London
Writing by Humeyra Ayaz
Anadolu Agency
energy@aa.com.tr
