According to a new IEA report, spending on clean energy technology, spurred on by affordability and security concerns, is outpacing investment into fossil fuels.
An estimated $2.8 trillion in U.S. dollars is expected to be invested in energy this year, of which, more than $1.7 trillion is expected to go to clean technologies. Renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements and heat pumps are all seeing increased spending globally, IEA’s World Energy Investment said.
Only about $1 trillion is going to coal, oil and gas, IEA said. Driven by renewables and electric vehicles, the increase in clean energy investment is expected to rise by 24 percent between 2021 and 2023, compared to a 15 percent increase in the investments into fossil fuel during the same period.
More than 90 percent of the increase in clean energy investment comes from advanced economies and China, the report said.
“Clean energy is moving fast – faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA Executive Director Faith Birol. “For every dollar invested in fossil fuels, about $1.7 are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”
Low-emissions electricity technologies like solar are expected to account for nearly 90 percent of power generation investments. Global heat pump sales have seen double-digit annual growth since 2021, and electric vehicle sales jump by a third in 2023, as consumers invest in more electrified end-uses.
The clean energy investment has been boosted by strong economic growth and volatile fossil fuel prices raising concerns about energy security.
The report said spending on upstream oil and gas is expected to rise by 7 percent this year, taking it back to pre-pandemic levels, but that few oil companies are investing more than before the pandemic.
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