IEA: ‘Clean energy investment this year will be twice the amount for fossil fuels’

According to the latest edition of International Energy Agency’s annual World Energy Investment report, global investment in clean energy is set to reach almost double the amount going to fossil fuels in 2024, despite pressures on financing.

Total energy investment worldwide is expected to exceed $3 trillion in 2024 for the first time, with some $2 trillion set to go toward clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps.

The remainder, slightly over $1 trillion, is going to coal, gas and oil. Combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time. The new report warns, however, that there are still major imbalances and shortfalls in energy investment flows in many parts of the world.

‘New records’

“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,” said IEA Executive Director Fatih Birol. […] “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.”

When the Paris Agreement was reached in 2015, the combined investment in renewables and nuclear for electricity generation was twice the amount going to fossil fuel-fired power. In 2024, this is set to rise to ten times as much, the report highlights.

As solar PV leeads the transformation of the power sector, more money is now going into solar PV than all other electricity generation technologies combined. In 2024, investment in solar PV is set to grow to $500 billion as falling module prices spur new investments.

Disparities in international capital flows

Three major economies alone – China, Europe, and the US – make up more than two-thirds of global clean energy investment, underlining the disparities in international capital flows into energy.

Global upstream oil and gas investment is expected to increase by 7% in 2024 to reach $570 billion, following a similar rise in 2023. Coal investment continues to rise, with more than 50 gigawatts of unabated coal-fired power approved in 2023, the highest since 2015.

In addition to economic challenges, grids and electricity storage have been a significant constraint on clean energy transitions. But spending on grids is rising and is set to reach $400 billion in 2024. The increase is largely due to new policy initiatives and funding in Europe, the United States, China and some countries in Latin America.

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