France – The investment in clean energy is going to be twice the amount going to fossil fuels in 2024. Total energy investment worldwide is expected to exceed $3 trillion in 2024 for the first time, with some $2 trillion set to go toward clean according to the latest edition of the IEA’s annual World Energy Investment report. The remainder, slightly over $1 trillion, is going to coal, gas and oil.
The new report warns that there are still major imbalances and shortfalls in energy investment flows in many parts of the world. It highlights the low level of clean energy spending in emerging and developing economies (outside China) led by India and Brazil.
Global clean energy investment
China is set to account for the largest share of clean energy investment in 2024, reaching an estimated $675 billion. This results from strong domestic demand across three industries in particular – solar, lithium batteries and electric vehicles. Europe and the United States follow, with clean energy investment of $370 billion and $315 billion respectively. These three major economies alone make up more than two-thirds of global clean energy investment.
Oil and gas
Global upstream oil and gas investment is expected to increase by 7% in 2024 to reach $570 billion, following a similar rise in 2023. The growth in spending in 2023 and 2024 is predominantly by national oil companies in the Middle East and Asia. The report finds that oil and gas investment in 2024 is broadly aligned with the demand levels implied in 2030 by today’s policy settings, but far higher than projected in scenarios that hit national or global climate goals. Clean energy investment by oil and gas companies reached $30 billion in 2023, accounting for only 4% of the industry’s overall capital spending, according to the report. Meanwhile, coal investment continues to rise, with more than 50 gigawatts of unabated coal-fired power approved in 2023, the highest since 2015.
Storage
In addition to economic challenges, grids and electricity storage have been a significant constraint on clean energy transitions. But spending on grids is rising and is set to reach $400 billion in 2024, having been stuck at around $300 billion annually between 2015 and 2021. The increase is largely due to new policy initiatives and funding in Europe, the United States, China and some countries in Latin America. Meanwhile, investments in battery storage are taking off and set to reach $54 billion in 2024 as costs fall further. Yet again, this spending is highly concentrated. For every dollar invested in battery storage in advanced economies and China, only one cent was invested in other emerging and developing economies.
