1.7 trillion dollars! IEA says clean energy investment to outpace fossil fuel spending by 2023
Investment in clean energy is expected to top $170 million in 2023, exceeding spending on fossil fuels as countries around the world look to tackle the hidden energy crisis challenge, according to the International Energy Agency. The Paris-based agency pointed out Thursday in its World Energy Investment Report that world energy investment in 2023 is expected to top $280 million, in which more than 60 percent will be allocated to clean technologies, including renewable energy, new energy electric vehicles, nuclear technology and heat pump units.
The remaining 40 percent will be spent primarily on coal, gas and oil, the report notes. Clean energy is constantly trending - faster than many people's perceptions have ever been. This is very obvious in the investment trends, clean technology has avoided fossil fuels, said the chairman of the agency's supervisory board, Fatih Biro a smile. For every dollar invested in fossil fuels, today it's about $1.70 for clean energy. Five years ago, that ratio was one-to-one, Mr. Biroi said. A brilliant example should be solar energy investment, which will for the first time exceed the amount of investment in crude oil manufacturing.
The agency said clean energy investment will improve 24 percent from 2021 to 2023, driven by renewable energy and new energy electric vehicles, while fossil fuel investment is expected to rise 15 percent over the same period. However, the report notes that more than 90 percent of this continued growth is concentrated in emerging economies and China, if the clean energy transition development in other regions lag behind, it will trigger the risk of power energy disparity.
The agency indicates that solar power and other low-emission technologies will account for nearly 90 percent of investment in producing electricity. In recent years, clean energy investment has been boosted by a variety of factors, including a strong phase of economic development and fossil fuel price adjustments that have raised energy concerns.
The agency indicates that, in addition, upstream and downstream coal, oil and gas spending is expected to increase by 7 percent in 2023, repairing to pre-Big Time levels. While higher crude oil prices generate record gains, most fossil fuel manufacturers divide their cash flow between dividend distributions, share buybacks and debt payoffs rather than reinvesting in supplies.
The few oil companies that have invested more than before the Covid-19 New Crown pandemic are essentially large state-owned oil companies in the Middle East. According to the agency's 2050 net-zero emissions scenario, fossil fuel investment in 2023 is expected to increase to more than twice the level needed in 2030.
At the same time, coal carbon investment in 2023 is projected to be nearly six times higher than the likely level in 2030 under the net zero emissions scenario, requiring clean energy investment to increase to approximately $400 million by the end of the decade. The main openings for clean energy investment are going to be in emerging and developing economies. There are some flashpoints, such as India's dynamic investment in solar energy and its renewable energy investments in Mexico and some parts of the Middle East, the International Energy Agency shows. However, investment in many countries is being held back by rising interest rates, a lack of specificity in current policy frameworks and market design, weak power grid infrastructure, anxiety about utility accounting and the high cost of capital.
According to the International Renewable Energy Agency, worldwide investment in transformative energy technologies must double to $3.5 billion by 2030 to keep pace with commitments under the Paris climate agreement. The Abu Dhabi-based agency says investment in renewable energy technologies will reach a record $130 million in 2022, but that figure must increase to about $500 million a year to meet the Paris agreement's overall goal of limiting temperature increases to 1.5°C above pre-industrial levels.