Global clean energy investment to 2x fossil fuel spending in 2024: IEA

For the first time, total energy investment worldwide is expected to surpass $3 trillion in 2024. Of this, around $2 trillion will be allocated to clean technologies, including renewables, nuclear power, grids, storage, low-emissions fuels, and efficiency improvements. The remaining slightly over $1 trillion will be invested in coal, gas, and oil. Notably, in 2023, investment in renewable power and grids combined surpassed fossil fuel spending for the first time, as per IEA’s World Energy Investment report.

However, the report warns of significant imbalances and shortfalls in energy investment flows globally. It highlights particularly low levels of clean energy spending in emerging and developing economies outside China, which is set to exceed $300 billion for the first time, led by India and Brazil. Despite this milestone, this investment accounts for only about 15 per cent of global clean energy investment, far below what is needed to meet the rising energy demand in these countries, where high capital costs are stalling the development of new projects.

The report underscores that since the Paris Agreement was reached in 2015, the combined investment in renewables and nuclear for electricity generation has grown to ten times the amount going to fossil fuel-fired power by 2024. Solar photovoltaic (PV) is at the forefront of this transformation, with investment in solar PV set to grow to $500 billion in 2024, as falling module prices drive new investments.

China is poised to dominate clean energy investment in 2024, with an estimated $675 billion. Europe and the US follow with clean energy investments of $370 billion and $315 billion, respectively. These three major economies collectively account for more than two-thirds of global clean energy investment, highlighting the disparities in international capital flows into energy.

Economic challenges have compounded the constraints posed by grids and electricity storage on clean energy transitions. However, spending on grids is on the rise, projected to reach $400 billion in 2024 after being stagnant at around $300 billion annually between 2015 and 2021. This increase is largely attributed to new policy initiatives and funding in Europe, the US, China, and several countries in Latin America.

“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.

Fibre2Fashion News Desk (DP)