Low-Carbon Energy Tech Investment Exceeds $1 Trillion for First Time Globally

Energy transition investment rose 31% to draw level with fossil fuels

thumbnail

Investments in the low-carbon energy transition have accounted for a record-breaking $1.1 trillion in 2022 and have reached parity with capital deployed for fossil fuel supply, a BloombergNEF report has said.

The investment was primarily driven by the energy crisis and policy action, leading to faster deployments of clean energy technologies.

“Our findings put to bed any debate about how the energy crisis will impact clean energy deployment,” said Albert Cheung, Head of Global Analysis at BNEF. “Rather than slowing down, energy transition investment has surged to a new record as countries and businesses continue to execute transition plans.”

BNEF’s Energy Transition Investment Trends annually tracks how much funding businesses, financial institutions, governments, and end-users are committing to the low-carbon energy transition.

The report identified that all sectors achieved a new record level of investment in 2022, including renewable energy, energy storage, electrified transport, electrified heat, carbon capture and storage (CCS), hydrogen, and sustainable materials.

The only exception was nuclear power investment, which remained broadly flat.

Renewable energy remained the largest sector in investment terms, achieving a new record of $495 billion committed in 2022, up 17% from the year prior.

Electrified transport, which includes spending on electric vehicles and associated infrastructure, accounted for a 54% increase year-on-year with a $466 billion investment in 2022.

Despite interest from the private sector and growing policy support, the hydrogen sector received the least financial commitment at just $1.1 billion in 2022, which accounts for 0.1% of the total investment.

Yet the report suggests that the hydrogen sector is still the fastest growing with investment more than tripling over the year before.

Country-Wise Investments

China was the leading country in attracting energy transition investment, accounting for $546 billion, which comprises half of the global total.

The European Union region accounted for $181 billion, with countries like Germany, France, and the United Kingdom leading the investments.

The United States mobilized $141 billion in investments in clean energy technologies.

Investment Categories

The report also finds that climate-tech corporate finance totaled $119 billion in 2022. This investment category, not included in the $1.1 trillion, describes new equity financing raised by companies in the climate-tech space, either from public markets or private investors.

Supply chain and manufacturing investment rose to $79 billion, dominated by China.

BNEF also reported that investments in manufacturing facilities for clean energy technologies, grew to $78.7 billion in 2022, up from $52.6 billion in 2021.

Manufacturing facilities for batteries and related components formed the largest share of this at $45.4 billion, while solar factories attracted $23.9 billion.

China accounted for 91% of manufacturing investments in 2022, despite efforts from other countries to capture more of the global clean energy opportunity.

Between 2023 and 2026, BNEF estimates that factory investment for clean energy technologies only needs to average $35 billion per year, to get on track for its Net Zero Scenario.

Ramp-up Needed for Net Zero

Despite 2022’s results, global investment in lower-carbon technologies remains woefully short of what is needed to confront climate change.

For the world to get on a 2050 “net-zero” CO2 emissions trajectory, such investment must immediately triple, BNEF estimates.

Including the additional $274 billion invested in the power grid, energy transition investment hit $1.38 trillion in 2022.

By comparison, the world must invest an annual average of $4.55 trillion for the remainder of this decade to get on track under the net-zero scenario, the report concluded.

According to Mercom Capital’s 2022 Solar Funding and M&A Report, global corporate funding for solar companies, including venture capital, private equity, debt financing, and public markets, amounted to $24.1 billion in 2022.

The global corporate funding for energy storage, smart grid, and energy efficiency companies in 2022 totaled $31.7 billion, according to Mercom’s Annual and Q4 2022 Funding and M&A Report for Storage, Grid and Efficiency.

thumbnail

Gautamee Hazarika

RELATED POSTS

Mercom Research Focus
thumbnail
India Installs a Record 2.5 GW of Solar Open Access in 2022, Up 92% YoY

India added 2.5 GW of solar open access in the calendar year (CY) 2022, a year-over-year (YoY) increase of 92% from the 1.3 GW installed in CY 2021, according to the newly released 2022 Q4 & Annual Mercom India Solar Open Acce...

March 15, 2023

Solar

Kerala Issues Empanelment Tender for 100 MW of Solar Projects

The Kerala State Electricity Board (KSEB) has invited bids to empanel solar developers to set up 100 MW of grid-connected rooftop and ground-mounted projects. Empanelled vendors also must furnish operation and maintenance (O&M...

March 20, 2023

Tenders and Auctions

Gujarat Invites Bids to Procure 500 MW of Wind Power with Greenshoe Option

Gujarat Urja Vikas Nigam (GUVNL) has invited bids to procure power from 500 MW of grid-connected wind projects (Phase V) with a greenshoe option of an additional capacity of up to 500 MW. The last day to submit the bids online is ...

March 17, 2023

Rooftop

MSMEs Adopt Solar Readily If Savings on Power Bills Cover EMI Cost: Interview

Small businesses are open to adopting rooftop solar if loan repayment is not an additional burden and is equal to their savings on electricity bills. Entities in the commercial and industrial (C&I) segment are increasingly mov...

March 17, 2023

Magazine

DON'T MISS AN ISSUE!

Mercom Cleantech Magazine

Get Your Copy Today!

magazines

Latest News

thumbnail
Maharashtra Approves Tariffs for 8.7 MW of Solar Power Under KUSUM Program

The Maharashtra Electricity Regulatory Commission (MERC) has adopted tariffs of ₹3.28 (~$0.039)/kWh, ₹3.29 (~$0.039)/kWh, and ₹3.30 (~$0.040)/kWh for the procurement of 8.7 MW of solar power on a long-term basis. The Commission...

March 21, 2023

thumbnail
Brookfield to Aquire KKR’s 50% Stake in Renewable Developer X-Elio

Global investment firm Kohlberg Kravis Roberts (KKR) has agreed to sell 50% of its stake in renewable developer X-ELIO to its joint venture partner Brookfield Renewable. Financial details were not disclosed. Since KKR’s...

March 21, 2023

thumbnail
NTPC’s Subsidiary Will Develop Renewable Projects for IndianOil Refineries

NTPC Limited’s wholly owned subsidiary, NGEL, has entered into a joint venture agreement with Indian Oil Corporation (IOCL) to develop renewable energy projects that can meet round-the-clock power requirements to meet the...

March 21, 2023

thumbnail
Constant Climate-Centric Funding Can Limit Global Temperature Under 1.5°C 

Financial support from developed economies to developing nations which is a critical enabler of climate action has been inadequate, said scientists in the latest Intergovernmental Panel on Climate Change (IPCC) report...

March 21, 2023

thumbnail
India Voices Concern over Europe’s Carbon Tariff Measure at WTO

India has expressed concern about the carbon border measures proposed by the European Union (EU) at a recent meeting of the World Trade Organization’s (WTO) Committee on Trade and Environment. Presenting a paper on the increasing...

March 21, 2023

thumbnail
JSW and Greenko Win Karnataka’s Bid for 1 GW of Pumped Storage Projects

JSW Neo Energy (JSW Energy) and Greenko KA 01 IREP (Greenko) have won the Power Company of Karnataka’s (PCKL) auction to supply 1 GW of energy for 8 hours daily from pumped hydro storage projects providing continuous 5-hour...

March 21, 2023

thumbnail
Sterling and Wilson Bags BoS Package Tender for 1.2 GW Solar Projects

Sterling and Wilson Renewable Energy, the solar engineering, procurement, and construction (EPC) arm of Shapoorji Pallonji Group, won NTPC’s tender for the balance of system (BOS) package to develop 1.2 GW (4*300 MW) of solar...

March 21, 2023

thumbnail
Indian Oil Floats O&M Tender for 8 MW Solar Project in Ahmedabad

Indian Oil Corporation (IOCL) has invited bids for the operation and maintenance (O&M) of an existing 8 MW solar power project at the LPG bottling plant at Sanand in Ahmedabad for five years. The last date to submit the bids...

March 21, 2023

thumbnail
IIT Mandi Creates Low-Cost Method for Solar Cell Metal Oxide Layers

Researchers at the Indian Institute of Technology Mandi (IIT Mandi) have claimed a breakthrough in producing metal oxide layers for use in advanced architecture silicon solar cells using a cost-effective method. This innovative...

March 21, 2023

thumbnail
Government Allows NTPC to Invest Over 30% of Net Worth in its Green Arm

The government has allowed NTPC to invest in its subsidiary, NTPC Green Energy (NGEL), beyond the limit allowed for a ‘maharatna’ central public sector enterprise (CPSE). The extant guidelines prescribe a ceiling of 30% of a...

March 21, 2023

MORE NEWS