August 29, 2024
According to the latest report from the International Energy Agency (IEA), global spending on clean energy technologies and infrastructure is expected to exceed $2 trillion by 2024, despite rising financing costs limiting the development of new projects, particularly in emerging and developing countries. The report points out that overall energy investment is expected to exceed $3 trillion for the first time, of which about $2 trillion will be used for clean technologies, including renewable energy, electric vehicles, nuclear energy, power grids, energy storage, low emission fuels, efficiency improvements, and heat pumps. And the remaining slightly over $1 trillion will be invested in coal, natural gas, and oil. In 2023, investment in renewable energy and the power grid exceeded investment in fossil fuels for the first time.
The report warns that there is a serious imbalance in global energy investment flows, especially in emerging and developing countries (excluding China). The clean energy investment in these countries has exceeded $300 billion for the first time, but only accounts for about 15% of global clean energy investment, far below the level required to meet the growing energy demand of these countries. High capital costs are restraining the development of new projects.
IEA Executive Director Fatih Birol said, “Even under difficult economic conditions, clean energy investment has set a new record, demonstrating the strong momentum of the global energy economy. Today, for every $1 invested in fossil fuels, almost $2 is invested in clean energy.” He also pointed out that the growth of clean energy investment benefits from strong economic factors, sustained cost reduction, and energy security considerations, as well as industrial policies, with major economies competing in the new clean energy supply chain.
When the Paris Agreement was reached in 2015, investment in renewable energy and nuclear power was twice that of fossil fuel power generation. By 2024, this proportion is expected to increase tenfold, and solar photovoltaics will dominate the transformation of the power sector. It is expected that solar photovoltaic investment will reach $500 billion by 2024, and the decline in module prices has stimulated new investment.
China is expected to hold the largest share of clean energy investment by 2024, reaching $675 billion. This is mainly due to the strong demand for solar energy, lithium batteries, and electric vehicles in China. Europe and the United States followed closely, with clean energy investments of $370 billion and $315 billion, respectively. These three major economies account for over two-thirds of global clean energy investment, highlighting the imbalance in international energy capital flows.
Global upstream investment in oil and gas is expected to grow by 7% in 2024, reaching $570 billion, mainly from national oil companies in the Middle East and Asia. The report points out that oil and gas investment is roughly consistent with the demand level set by 2030 policies, but far higher than the scenario of achieving national or global climate goals. In 2023, oil and gas companies will invest $30 billion in clean energy, accounting for only 4% of the industry’s overall capital expenditures. At the same time, coal investment continues to rise, with over 50 gigawatts of non emission reducing coal-fired power projects approved in 2023, the highest since 2015.
In addition to economic challenges, the power grid and electricity storage are also important constraints on the transition to clean energy. But investment in the power grid is increasing, expected to reach $400 billion by 2024, compared to an average of about $300 billion per year between 2015 and 2021.
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