In 2023, combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time. Investment in clean energy this year is set to be twice the amount going to fossil fuels.
Total energy investment worldwide is expected to exceed $3 trillion in 2024 for the first time, with some $2 trillion set to go toward clean technologies – including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps – according to the latest edition of the IEA’s annual World Energy Investment report.
For the first time ever, combined investment in renewables and grids overtook the amount spent on fossil fuels in 2023. In particular, solar PV is attracting huge levels of spending. The remainder, slightly over $1 trillion, is going to coal, gas and oil.
China, which is seeing strong domestic demand for solar, lithium batteries and electric vehicles, is set to account for the largest share of clean energy investment this year, reaching an estimated $675 billion. Europe and the United States follow, with clean energy investment of $370 billion and $315 billion, respectively. These three major economies alone make up more than two-thirds of global clean energy investment.
In emerging and developing economies outside China, clean energy investment in 2024 is set to surpass $300 billion for the first time, led by Brazil and India. Still, the report finds that this level of spending – which accounts for only about 15% of the global total – is far below what is required to meet growing energy demand in many of these countries, where the high cost of capital is holding back the development of new projects.
Global upstream oil and gas investment is expected to increase by 7% in 2024 to reach $570 billion, following a similar rise in 2023. This is broadly aligned with the demand levels implied in 2030 by today’s policy settings, according to the report – but it is far higher than projected in scenarios that hit national or global climate goals. Notably, clean energy investments by oil and gas companies accounted for only 4% of the industry’s overall capital spending in 2023.
Spending on grids – key to enabling faster clean energy transitions – is set to reach $400 billion in 2024, having been stuck at around $300 billion annually between 2015 and 2021. Investments in battery storage are also taking off and are poised to reach $54 billion in 2024. However, this spending also remains highly geographically concentrated.
“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 our Executive Director Fatih Birol. “The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains. More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”
/IEA/