According to the International Energy Agency (IEA), despite higher financing costs hindering new projects, especially in emerging and developing economies, global clean energy technology and infrastructure spending is expected to reach $2 trillion by 2024.
The International Energy Agency stated in its latest report that despite facing financing pressures, global clean energy investment will almost double that of fossil fuel investment by 2024 with the help of improving supply chains and reducing the cost of clean technologies.
According to the latest World Energy Investment Report by the International Energy Agency, the total global energy investment is expected to exceed $3 trillion for the first time in 2024, of which approximately $2 trillion will be used for clean technologies, including renewable energy, electric vehicles, nuclear power, power grids, energy storage, low emission fuels, efficiency improvements, and heat pumps.
The remaining slightly over $1 trillion will be used for coal, natural gas, and oil. In 2023, the total investment in renewable energy and the power grid exceeded the expenditure on fossil fuels for the first time.
However, the new report warns that there are still serious imbalances and shortages in energy investment flows in many parts of the world. It highlights the relatively low level of clean energy spending in emerging and developing economies (excluding China), led by India and Brazil, where clean energy spending is expected to exceed $300 billion for the first time.
Nevertheless, this accounts for only about 15% of global clean energy investment, far below the level required to meet the growing energy demands of many of these countries, whose high capital costs hinder the development of new projects.
Fatih Birol, Executive Director of the International Energy Agency, said, "Even under challenging economic conditions, investments in clean energy are setting new records, highlighting the momentum behind the new global energy economy. Today, for every dollar invested in fossil fuels, nearly two dollars are invested in clean energy"
He added, "The growth in clean energy spending is due to a strong economy, sustained cost cutting, and considerations for energy security. However, as major economies compete for advantages in the new clean energy supply chain, industrial policies also have a strong push. More work must be done to ensure that investments reach where they are most needed, especially in developing economies that currently suffer from a severe lack of affordable, sustainable, and secure energy"
When the Paris Agreement was signed in 2015, the total investment in renewable energy and nuclear power generation was twice that of fossil fuel power generation. The report emphasizes that by 2024, this number will increase tenfold, and solar photovoltaics will lead the transformation of the power industry. The current investment in solar photovoltaics is more than all other power generation technologies combined. In 2024, as the decline in module prices stimulates new investment, investment in solar photovoltaics will grow to $500 billion.
In 2024, China will account for the largest share of clean energy investment, estimated to reach 675 billion US dollars. This is mainly due to strong domestic demand in the three industries of solar energy, lithium batteries, and electric vehicles.
According to the International Energy Agency, Europe and the United States are closely behind, with clean energy investments of $370 billion and $315 billion, respectively. These three major economies alone account for over two-thirds of global clean energy investment, highlighting the differences in international capital inflows into energy.
After similar growth in 2023, global upstream oil and gas investment is expected to increase by 7% to reach $570 billion in 2024.
The expenditure growth in 2023 and 2024 will mainly come from national oil companies in the Middle East and Asia. The report found that oil and gas investment in 2024 is roughly consistent with the demand forecast level for 2030 in the current policy environment, but this is far higher than the forecast under the scenario of achieving national or global climate goals.
The report states that in 2023, clean energy investments by oil and gas companies will reach $30 billion, accounting for only 4% of the industry's overall capital expenditures. At the same time, coal investment continues to grow, with approved coal-fired power generation exceeding 50 gigawatts in 2023, the highest level since 2015.
In addition to economic challenges, the power grid and electricity storage have always been important constraints on the transition to clean energy. But power grid spending is on the rise, reaching $400 billion by 2024, while this number has remained at around $300 billion per year between 2015 and 2021.