2024 global investment in clean energy at $2 trillion is double that in fossil fuels: IEA

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Total investments worldwide on clean energy technologies and infrastructure, including renewables, nuclear power, electric vehicles (EVs), grids, storage, low-emissions fuels and energy efficiency improvements is expected to touch $2 trillion in 2024, according to the International Energy Agency (IEA).  

The IEA’s latest annual World Energy Investment Report, released earlier this month, says that despite pressures on financing, total energy investment worldwide is expected to exceed $3 trillion in 2024 for the first time, with investment in clean energy set to almost double the amount going to fossil fuels, helped by improving supply chains and lower costs for clean technologies. 

“Global spending on clean energy technologies and infrastructure on track to hit $2 trillion in 2024 even as higher financing costs hinder new projects, notably in emerging and developing economies,” the Paris-based IEA said.  

“In 2023, combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time,” it added. This year, slightly over $1 trillion investment is going to fossil fuels like coal, gas and oil. 

“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 IEA Executive Director Fatih Birol said.  

“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But 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,” he added. 

The new report warns 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 $300 billion for the first time – led by India and Brazil. 

However, this accounts for only about 15 percent 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, the report said. 

China is estimated to account for the largest share of clean energy investment in 2024 with $675 billion, while Europe is set to account for $370 billion and the US for $315 billion. 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.  

China’s massive clean energy investment results from strong domestic demand across three industries in particular – solar, lithium batteries and electric vehicles.  

When the Paris Agreement on tackling climate change was reached in 2015, the combined investment in renewables and nuclear power 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 said. 

Solar Photovoltaics (PV) is 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 $500 billion as falling module prices spur new investments, according to the report. 

Global investment in oil and gas exploration is expected to increase by 7 percent in 2024 to $570 billion, following a similar rise in 2023. This was mostly led by national oil companies in the Middle East and Asia, the report said. Clean energy investment by oil and gas companies reached $30 billion in 2023, accounting for only 4 percent of the industry’s overall capital spending. 

Moreover, coal investment continues to rise, with more than 50 gigawatts (GW) of coal-fired power approved in 2023, the highest since 2015, the report added.