Renewable energy sources are likely to draw $2 trillion globally in 2024, out of a total $3 trillion in energy investment projected for the year, according to an International Energy Agency analysis.
The International Energy Agency (IEA) projects that global energy investment will surpass $3 trillion for the first time.
“Around $2 trillion is predicted to go into clean technologies such as renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and heat pumps. The remaining funds, slightly more than $1 trillion, are earmarked for coal, gas, and oil,” according to the report.
It revealed that global investment in clean energy was expected to nearly triple the amount going to fossil fuels in 2024, despite pressures on financing. It attributed this to improved supply networks and declining costs for sustainable technology.
The energy organization did note that significant disparities and gaps in energy investment persisted in many regions of the world, despite the fact that spending on clean energy smashed all previous records.
It said that China was expected to get the greatest portion of clean energy investment this year, amounting to an estimated $675 billion, due to its robust domestic market for solar, lithium batteries, and electric cars.
With $370 billion and $315 billion in clean energy investments, respectively, Europe and the US come next.
The research stated that “more than two-thirds of global clean energy investment is made up of these three major economies alone.”
According to reports, clean energy investment in emerging and developing economies – led by Brazil and India – is expected to cross $300 billion in 2024 for the first time.
The report pointed out that in many of those nations, where the high cost of capital was impeding the development of new projects, this level of spending, which made up only 15% of the worldwide total, was significantly less than what was needed to fulfill expanding energy demand.
The International Energy Agency (IEA) projects that worldwide upstream oil and gas investment would climb by 7% in 2024 to $570 billion, after a similar increase in 2023.
“The report states that this is roughly in line with the demand levels implied in 2030 by the current policy settings, but it is significantly higher than projected in scenarios that hit national or global climate goals.”
According to the research, “Notably, oil and gas companies’ clean energy investments accounted for just 4% of the industry’s overall capital spending in 2023.”
It also said that grid spending, which is essential to facilitating quicker transitions to renewable energy, will top $400 billion in 2024 after hovering around $300 billion per year between 2015 and 2021.
It was also reported that battery storage investments were on the rise and would reach $54 billion by 2024. Still, there is a significant geographic concentration in this spending.
The IEA Executive Director, Fatih Birol, stated, “Clean energy investment is establishing new records even in difficult economic conditions, showing the momentum behind the new global energy economy. Today, over two dollars are invested in sustainable energy for every dollar going towards fossil fuels.
“The increase in clean energy spending is supported by good economics, ongoing cost savings, and energy security considerations. However, industrial policy also plays a significant role, as big economies vie for dominance in emerging clean energy supply chains.”
“More has to be done to make sure that investment gets to the areas that need it most, especially the developing countries where access to secure, affordable, and sustainable energy is sorely lacking right now.”
Nigeria selected petrol as its transition fuel in its plan because it is less expensive and more environmentally friendly than petrol and diesel.
Similarly, the Rural Electrification Agency intends to use solar networks to generate approximately nine megawatts of electricity.
