Global investment in clean energy is set to reach almost double the amount going to fossil fuels in 2024, helped by improving supply chains and lower costs for clean technologies, according to a new IEA report.
Total energy investment worldwide is expected to exceed US$3 trillion in 2024 for the first time, with some US$2 trillion set to go toward clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – according to the latest edition of the IEA’s annual World Energy Investment report.
The remainder, slightly over US$1 trillion, is going to coal, gas and oil, according to the analysis.
The new report warns, however, that there are still major imbalances and shortfalls in energy investment flows in many parts of the world.
It highlights the low level of clean energy spending in emerging and developing economies (outside China), which is set to exceed US$300bn for the first time – led by India and Brazil.
Yet, 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.
IEA executive director Fatih Birol (pictured) 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.
“But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains.
“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, IEA said.
In 2024, this is set to rise to ten times as much, the report highlights, with solar PV leading 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 US$500bn as falling module prices spur new investments, the report found.
China is set to account for the largest share of clean energy investment in 2024, reaching an estimated US$675bn.
This results from strong domestic demand across three industries in particular – solar, lithium batteries and electric vehicles, according to the analysis.
Europe and the United States follow, with clean energy investment of US$370bn and US$315bn respectively.
These three major economies alone make up more than two-thirds of global clean energy investment, underlining the disparities in international capital flows into energy, the report found.