According to the new World Energy Investment 2024 report from the International Energy Agency (IEA), despite financing pressures, global clean energy investment will be nearly twice that of fossil fuels this year.
The surge in funding will be aided by lower cost renewable energy technologies and improving supply chains, a press release from the IEA said.
In 2024, the world’s total energy investment is projected to surpass $3 trillion for the first time. Approximately $2 trillion will be put toward green technologies like renewable power sources, grids and storage; electric vehicles (EVs); low-emissions fuels; nuclear power; and heat pumps and efficiency improvements, the report said. The remaining just over $1 trillion will fund oil, gas and coal.
“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 Fatih Birol, IEA’s executive director, in the press release.
The report warns of big imbalances and shortages in energy investment that still exist all over the globe. It points to the low amount of green energy spending in developing and emerging economies outside China. However, with Brazil and India leading the way, for the first time these investments are predicted to be more than $300 billion. But that is just roughly 15 percent of renewable energy investment worldwide — far less than is needed to meet the increasing energy demand in many nations.
“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,” Birol said. “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.”
In 2015, when the Paris Agreement was signed, the total green and nuclear investment for power generation was two times that being put toward fossil fuel energy. This year, it is set to increase to 10 times, according to the report, led by solar photovoltaic (PV) technologies.
“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,” the press release said.
The biggest renewable energy investment share in 2024 will come from China at roughly $675 billion, primarily from solar, EVs and lithium batteries. The second largest will be provided by Europe and the United States with $370 and $315 billion, respectively.
The transition to clean energy has been hampered by power grids and electricity storage. However, grid spending is projected to reach $400 billion this year after being stuck at about $300 billion per year from 2015 to 2021.
The jump is mostly due to new policies and funding in the U.S., Europe and China, as well as some Latin American countries. As battery storage costs continue to fall, investments are set to be $54 billion.
“Yet again, this spending is highly concentrated. For every dollar invested in battery storage in advanced economies and China, only one cent was invested in other emerging and developing economies,” the press release said.
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