Clean Energy Investment Nears $2 Trillion in 2024 But Disparities Remain

Investment in solar alone is expected to surpass $500 billion in 2024


Global energy investment in 2024 is projected to exceed $3 trillion, with $2 trillion dedicated to clean energy technologies and infrastructure, according to the latest World Energy Investment 2024 report by the International Energy Agency (IEA).

This reflects a surge in clean energy investment since 2020, driven by advancements in renewable power, grids, and storage. The current trends in clean energy spending exceed those for 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 IEA Executive Director Fatih Birol.

Investment in solar photovoltaic technology alone is expected to surpass $500 billion in 2024, outpacing all other power generation sources combined.

Renewables integration and infrastructure upgrades have significantly boosted spending on grids and storage. Investment in grids, which had been stagnant at around $300 billion annually since 2015, is expected to reach $400 billion in 2024. New policies and funding initiatives in Europe, the U.S., China, and parts of Latin America are expected to drive this increase.

Spending Disparities

While clean energy investments have nearly doubled that of fossil fuels, significant disparities remain, particularly in emerging markets and developing economies (EMDE) outside China, which account for only about 15% of global clean energy expenditure.

Advanced economies and China account for 80% of global grid spending, highlighting the need for increased investment in other regions. Battery storage investments are also rising and are set to exceed $50 billion in 2024.

IEA said this disparity called for the urgent need to rebalance investments to ensure a secure and affordable transition from fossil fuels and achieve the ambitious goals set at COP28.

Despite signs of improvement, clean energy investments in EMDE outside China remain insufficient. In 2024, clean energy investments in these economies are projected to increase to $320 billion, a 50% rise since 2020. The increase is driven by rising investments in renewable power, which now account for half of all power sector investments in these regions.

Notable progress has been made in India, Brazil, Southeast Asia, and Africa, attributed to new policies, well-managed public tenders, and improved grid infrastructure. For instance, clean energy investments in Africa are projected to exceed U$40 billion in 2024, nearly doubling the 2020 figure.

However, much more effort is needed to ensure modern energy access and meet growing energy demand sustainably in the least-developed economies.

High Cost of Capital

The IEA report said the high cost of capital is a significant barrier to investment in clean energy projects and infrastructure in EMDE outside China, with financing costs at least twice as high as in advanced economies.

Macroeconomic and country-specific factors and energy sector-specific risks contribute to the high cost of capital. Enhanced support from development finance institutions and actions by national policymakers can play a major role in lowering financing costs and attracting more private capital.

Investment in energy efficiency and electrification in buildings and industry has remained resilient, with significant dynamism in the transport sector. Investment in transport is projected to reach new highs in 2024, driven by strong electric vehicle sales.

This highlights the importance of energy efficiency and electrification in achieving climate goals. Nuclear power investments are also set to increase in 2024, with total investment projected to reach $80 billion.

Despite these advancements, investment in fossil fuels remains significant.

Upstream oil and gas investment in 2024 is projected to return to 2017 levels, with Middle Eastern and Asian companies now representing a significantly larger portion of this total.

While fossil fuels continue to dominate investment in fuel supply, there is rapidly growing interest in low-emissions fuels from a low starting point.

For instance, investments in hydrogen electrolyzers have reached around $3 billion annually, though they are limited by demand uncertainty and a lack of reliable off-takers.

Rebalancing Investments

Achieving the COP28 goals requires a major rebalancing of investments. The report noted that global clean energy investment must double by 2030, and investment in EMDE outside China must quadruple.

Mobilizing additional, affordable financing is crucial for a safer and more sustainable future. Current investment trends fall short of what is needed to limit global warming to 1.5°C above pre-industrial levels and to achieve the interim goals set at COP28.

At the COP28 summit last December, world leaders settled for a weaker text that spoke of ‘transitioning away’ from fossil fuels instead of a more definitive ‘phase-out.’

While the momentum behind renewable power is strong, current spending trends will only cover about two-thirds of the investment needed to triple renewable capacity by 2030.

An additional $500 billion per year is required, according to the IEA’s Net Zero Emissions by 2050 Scenario, to close this gap fully, necessitating a doubling of current annual spending on renewable power generation, grids, and storage by 2030.

According to a report by IEA and International Finance Corporation, to meet the growing energy demand while aligning with the goals of the Paris Agreement, the annual investment in clean energy will have to increase by more than triple from $770 billion in 2022 to approximately $2.2-2.8 trillion per year by early 2030.


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