Clear Vitality Spending Will Surpass $2 Trillion This 12 months
Investments in carbon-free power will probably be twice as giant as fossil gas spending in 2024, the Worldwide Vitality Company predicts
Technicians from CP Photo voltaic work on the upkeep of photo voltaic panels at {a partially} solar-powered manufacturing facility within the industrial space of Nairobi, on October 9, 2023. Renewable power sources generate over 80 p.c of Kenya’s electrical energy.
Luis Tato/AFP through Getty Photographs
CLIMATEWIRE | Clear power is on fireplace.
International spending on renewables, nuclear, power effectivity and low-emissions fuels like hydrogen is about to eclipse $2 trillion in 2024, double the $1 trillion spent on fossil fuels, in accordance with the Worldwide Vitality Company’s annual evaluation of worldwide power spending.
The transformation is especially sturdy within the energy sector, the place worldwide funding in photo voltaic ($500 billion) is about to exceed spending on all different types of energy technology mixed.
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The IEA’s annual World Vitality Funding report is intently tracked by business analysts as a number one indicator for tendencies within the power business. This yr’s report predicts that spending on clear power will develop by nearly 6 p.c, up from almost $1.9 trillion in 2023.
The report additionally notes an uptick in clear power spending in rising markets, a vital growth for reaching the world’s local weather targets. And it offers proof that the wave in inexperienced power spending sought by President Joe Biden, with passage of the Inflation Discount Act in 2022, is beginning to take root. U.S. spending on clear power is projected to extend by $300 billion this yr.
The findings are significantly notable as a result of they arrive at a time when excessive rates of interest threaten to stymie the growth of cleaner power sources. However the influence of upper borrowing prices has been offset by easing provide chain constraints and continued price declines in renewable power applied sciences, the IEA stated.
“Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy,” IEA Government Director Fatih Birol stated in an announcement. “For every dollar going to fossil fuels today, almost two dollars are invested in clean energy.”
But significant challenges remain. The report notes that the biggest increase in new coal capacity occurred last year since 2015. Spending on oil and gas production, meanwhile, is on track to increase 7 percent to $570 billion. And while clean energy spending continues to grow, it is not happening fast enough to limit global temperature rise to 1.5 degrees Celsius.
IEA reckons that the current level of spending is enough to achieve two-thirds of the investment needed to triple renewable capacity by the end of the decade, as agreed to by negotiators at global climate talks in Dubai, United Arab Emirates, last year.
In emerging markets, energy spending is on track to approach $320 billion this year. That represents a 50 percent increase over 2020 levels and suggests new policy measures intended to green the energy supply are starting to take root. But despite the growth, emerging markets only account for 15 percent of global clean energy spending. That figure will have to increase if the world is to have any hope of reaching its climate goals, the IEA said.
“Extra should be executed to make sure that funding reaches the locations the place it’s wanted most, particularly the growing economies the place entry to inexpensive, sustainable and safe power is severely missing at the moment,” Birol said.
Renewables are expected to account for the largest portion of clean energy spending in 2024, at $771 billion. That would be up from $735 billion last year and $446 billion in 2020. Investments in energy efficiency measures are expected to hit $669 billion, up from $646 billion last year, while grid and storage investments are project to grow from $416 billion in 2023 to $452 billion this year.
Reprinted from E&E Information with permission from POLITICO, LLC. Copyright 2024. E&E Information offers important information for power and atmosphere professionals.
