Investment in clean energy is on track to nearly double that in fossil fuels in 2024, marking a significant shift in global energy investment trends, according to a recent report by the International Energy Agency (IEA).
The IEA's annual World Energy Investment report predicts that total energy investment worldwide will surpass US$3 trillion in 2024, with approximately US$2 trillion earmarked for clean technologies. This includes renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency enhancements, and heat pumps.
IEA Executive Director Fatih Birol underscored the significance of this shift, stating, “Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy.”
The report reveals that for every dollar invested in fossil fuels, nearly two dollars are now being invested in clean energy. Factors driving this surge include improving supply chains and declining costs for clean technologies, alongside considerations of energy security.
However, the report also points out significant imbalances in energy investment flows worldwide. Emerging and developing economies, excluding China, are expected to invest over US$300 billion in clean energy, yet this represents only about 15% of global clean energy investment.
Birol emphasized the importance of directing investment to where it's most needed, particularly in developing economies where access to affordable and sustainable energy is lacking.
In terms of regional investment, China is poised to lead with an estimated US$675 billion in clean energy investment in 2024, driven by strong domestic demand in industries such as solar, lithium batteries, and electric vehicles. Europe and the United States follow closely, with investments of US$370 billion and US$315 billion, respectively.
The report highlights a significant transformation in the power sector, with solar photovoltaic (PV) technology attracting the lion's share of investment. By 2024, investment in solar PV is projected to reach US$500 billion, surpassing all other electricity generation technologies combined.
These findings underscore the disparities in international capital flows into energy and emphasize the need for concerted efforts to ensure that investment reaches regions where it's most needed.
