Renewables

Clean energy investment in 2024 to hit USD 2 trillion, nearly double compared to fossil fuels

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June 6, 2024

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Published:

June 6, 2024

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Global investment in clean energy technologies and infrastructure in 2024 is expected to amount to USD 2 trillion, almost double the spending on fossil fuels. This is despite higher financing costs, which hinder new clean energy projects, especially in emerging and developing economies, according to the International Energy Agency (IEA).

Supply chain improvements and lower prices of clean technologies are the main drivers of growth in clean energy investment, which includes renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements, and heat pumps, the IEA said in its latest annual edition of the World Energy Investment report.

“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 coal, gas and oil in 2024 is expected to reach slightly over USD 1 trillion, the IEA said, recalling that in 2023, combined investment in renewable power and grids overtook the amount spent on fossil fuels for the first time.

Solar is leading the power sector transformation, with an expected USD 500 billion investment in 2024

The report also highlights that when the Paris Agreement was reached in 2015, the combined investment in electricity generation from renewables and nuclear energy was twice the amount going to fossil fuel-fired power, but that in 2024, this is set to rise to ten times as much.

Solar is leading the transformation of the power sector, with more money now going into PV than all other electricity generation technologies combined. In 2024, investment in solar PV is set to grow to USD 500 billion thanks to falling solar module prices, the IEA noted.

Spending on battery storage is expected to reach USD 54 billion this year

The report also notes that spending on grids is rising and is set to reach USD 400 billion in 2024, up from around USD 300 billion annually between 2015 and 2021. At the same time, investments in battery storage are taking off and are set to reach USD 54 billion in 2024 as costs fall further, the IEA noted.

Global disparities in clean energy investment

China is expected to account for the largest share of clean energy investment in 2024, with an estimated spending of USD 675 billion, followed by Europe and the United States, with USD 370 billion and USD 315 billion respectively. These three economies make up more than two-thirds of global clean energy investment, which, according to the IEA, underlines the global disparities in energy investment.

Investment in developing economies make up only 15% of the global figure

The level of clean energy spending in emerging and developing economies, not including China, is set to exceed USD 300 billion, but this accounts for only about 15% of global clean energy investment. In many of these countries, the high cost of capital is holding back the development of new projects, the IEA warned.

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