According to the International Energy Agency, global investment in low carbon electricity will increase by 10 times more than fossil fuel power in this year as a result of an increase in solar projects.
Global energy watchdog predicts that investments in clean energy, including renewables and nuclear power, as well as electric cars, power grids energy storage, low emission fuels, efficiency improvement and heat pumps, will reach $2tn by this year.
IEA estimates that the global clean energy investment figure will likely be twice as high in 2024 as the $1tn predicted for coal, oil, and gas.
Fatih Bibil, the executive director of the IEA, said that for every dollar spent on fossil fuels, nearly $2 is invested in clean energy.
Climate experts warn that global climate goals will not be achieved if more investments are made in fossil fuels.
The global coal investment has continued to grow, with over 50GW of coal-fired energy approved in 2016, the highest level since 2015.
The report predicts that global oil and gas investment will increase by 7% by 2024, reaching $570bn. This follows a similar increase in 2023. State-owned oil companies from the Middle East and Asia are leading the way.
The IEA warns that these investments, while aligned to the projected energy demand for 2030 based upon current policies, are still far above what is needed according forecast models if the world wants to meet its climate targets.
Birol stated that oil and gas companies “claim to be part the solution”, but continue to spend only 4% on average of their investment budgets for clean energy projects. National oil companies spend even lower.
This warning comes just days after a report by the IEA revealed that the world was behind schedule in meeting the goal to triple renewable electricity generation before 2030. The target is viewed as crucial to enable a rapid global transition away fossil fuels despite record investment.
Solar farms are driving the global clean energy investment, with a projected $500bn in investment this year. This is more than all other technologies combined.
The IEA stated that this was due to a 30% drop in the cost of solar technology in the past two years, and a rapid expansion of solar farms in China. In 2023 the country will have built the same amount of new capacity as the world had in the year prior.
Birol stated that “solar power is essential for the transformation of global energy systems.”
According to the report, investment in low-carbon energy – including renewables and nuclear – will likely reach $900 billion this year. This is 10 times more than gas and coal power generation.
Since 2015, when governments around the world signed the Paris Climate Accord, global investments have shifted more towards clean energy sources. In that year, fossil fuels were used to generate electricity in double the amount.
China will lead the world with its estimated $675bn in clean energy investments this year. This is due to its investments in solar power, lithium batteries, and electric vehicles. Europe and the US will invest respectively $370bn, and $315bn into clean energy.
Birol said that there is more to be done in order to make sure that investment in clean energy reaches the places that are most needed, namely developing economies, where affordable, reliable and secure energy access is lacking.
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