Clean Energy Spending Will Exceed $2 Trillion This Year
Carbon-free vitality investments will double fossil gas spending by 2024, the International Energy Agency predicts.
Technicians from CP Solar work to keep up photo voltaic panels at {a partially} solar-powered manufacturing unit in Nairobi’s industrial space, on October 9, 2023. Renewable vitality sources generate greater than 80 proportion of electrical energy in Kenya.
Luis Tato/AFP through Getty Images
CLIMATEWIRE | Clean vitality burns.
Global spending on renewables, nuclear, vitality effectivity and low-emissions fuels like hydrogen is ready to eclipse $2 trillion by 2024, double the $1 trillion spent on fossil fuels, in line with the International Energy Agency’s annual overview of worldwide vitality spending. .
The change is especially robust within the energy sector, the place world funding in photo voltaic ($500 billion) is ready to exceed spending on all different types of energy technology mixed.
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The IEA’s annual World Energy Investment report is intently adopted by trade analysts as a number one indicator of developments within the vitality trade. This yr’s report predicts that clear vitality spending will develop by almost 6 p.c, from almost $1.9 trillion by 2023.
The report additionally famous a rise in clear vitality spending in rising markets, a essential growth for reaching world local weather targets. And it offers proof that the wave of inexperienced vitality spending sought by President Joe Biden, in passing the Inflation Reduction Act in 2022, is starting to take root. US spending on clear vitality is anticipated to extend by $300 billion this yr.
The findings are notable as a result of they arrive at a time when excessive rates of interest threaten to curb the enlargement of cleaner vitality sources. But the influence of upper borrowing prices has been offset by easing provide chain constraints and continued value reductions in renewable vitality applied sciences, the IEA stated.
“Clean vitality investments set new data even in difficult financial circumstances, underscoring the momentum behind the world’s new vitality financial system,” stated IEA Executive Director Fatih Birol in a press release. “For each greenback that goes into fossil fuels as we speak, nearly two {dollars} are invested in clear vitality.”
But vital challenges stay. The report stated the largest enhance in new coal capability occurred final yr since 2015. Oil and gasoline manufacturing spending, in the meantime, is on observe to rise 7 p.c to $570 billion. And whereas spending on clear vitality continues to develop, it is not occurring quick sufficient to restrict world temperature rise to 1.5 levels Celsius.
The IEA considers that present ranges of spending are adequate to satisfy two-thirds of the funding wanted to triple renewable capability by the tip of the last decade, as agreed by negotiators on the world local weather talks in Dubai, United Arab Emirates, in final yr.
In rising markets, vitality spending is on observe to method $320 billion this yr. That represents a 50 p.c enhance over 2020 ranges and suggests new coverage measures meant to inexperienced the vitality provide are beginning to take root. But regardless of the progress, creating markets account for under 15 p.c of worldwide clear vitality spending. That quantity should enhance if the world has any hope of assembly its local weather targets, the IEA stated.
“More must be completed to make sure that funding reaches the areas the place it’s most wanted, particularly creating economies the place entry to low-cost, sustainable and protected vitality is presently missing,” stated stated Birol.
Renewables are anticipated to account for the most important share of fresh vitality spending by 2024, at $771 billion. That’s up from $735 billion final yr and $446 billion in 2020. Investments in vitality effectivity measures are anticipated to hit $669 billion, up from $646 billion final yr, whereas grid and storage investments are projected to will develop from $416 billion in 2023 to $452 billion this yr.
Reprinted from E&E information with permission from POLITICO, LLC. Copyright 2024. E&E News offers necessary information for vitality and setting professionals.
