The global investments in renewable energy have been stuck at one third of the cumulative global energy investments and it needs to grow by 250 per cent to meet the sustainability goals.
A report released by the International Energy Agency (IEA) says that the energy investments have been ‘misaligned’ and are out of sync of the world’s future energy needs. To beat the climate change and meet the Paris Climate Agreement goals, these investments would need a ‘rapid boost’.
IEA’s Executive Director Fatih Birol tweeted: “A worrying trend. Combined investments in renewables, efficiency, nuclear, batteries and other low-carbon tech are stuck at around 1/3rd of global energy investments. If we want to reach our climate targets, this share needs to be 2/3rds. That’s a key message of our report.” As per the report, in 2018 low-carbon energy attracted USD 620 billion in investments, but it would need to grow by 250 per cent and its share of world energy investment needs to rise from 35 per cent to 65 per cent by 2030 to meet sustainability goals.
“Whichever way you look, we are storing up risks for the future. Government leadership is critical to reduce them,” Birol added.
The silver lining, according to the World Energy Investment 2019 report, is that the global energy investment has stabilised at USD 1.8 trillion after three years of decline. The power sector received its maximum investment in 2018 at a little less than USD 800 billion, and it was more than the oil and gas for the third year in a row. The global investment in power declined by 1 per cent in comparison to 2017 as China cut down its spending on coal and solar projects and the Oil & gas sector reported an increase of 1 per cent due to spike in oil prices.
Another positive development has been the decline in the capital costs of renewable sources of energy. The costs of Solar photovoltaic (PV) fell by 75 per cent since 2010, onshore wind costs fell by 20 per cent and battery storage costs fell 50 per cent.
China’s burgeoning economy has been pushing investment in its energy sector. Investment in the country has fallen by 7 per cent in the last three years due to a 60 per cent reduction on coal power plant funding and it is still more than the spending on renewable and nuclear power. In Europe the investment on low-carbon energy options rose to almost 60 per cent of its total. India has also shown the most rapid rise from 2015, with a 12 per cent increase in funding over the time period.