'Clean Energy Is Moving Fast': Investments in Renewables Will Overtake Fossil Fuels for the First Time This Year, IEA Says

June 8, 2023 by Pressenza Leave a Comment

By EcoWatch

A new report from the International Energy Agency (IEA) says that investment in clean energy is "significantly outpacing" fossil fuel spending and will surpass it this year, with solar projects expected to exceed oil production expenditures for the first time.

By Cristen Hemingway Jaynes

According to the World Energy Investment report, the global energy crisis that followed Russia's invasion of Ukraine, as well as the growing affordability of renewables, has given rise to more sustainable alternatives, sparking a rise in investments.

In 2023, approximately $2.8 trillion will be invested in energy globally, the report said. More than $1.7 trillion of that amount is projected to be invested in green energy technologies like electric vehicles (EVs), renewables, power grids, nuclear energy, heat pumps, low-emissions fuels and improvements in energy efficiency. The remaining more than $1 trillion will be invested in gas, oil and coal.

Yearly investments in renewables are predicted to increase by 24 percent from 2021 to 2023, while fossil fuel investments are expected to rise just 15 percent. Advanced economies, as well as China, are responsible for more than 90 percent of the growth, which could jeopardize global energy equality if green energy investment increases aren't seen in other parts of the world.

Renewable energy technologies are projected to make up nearly 90 percent of power generation investment this year, led by solar energy.

Investments in solar are expected to reach more than $1 billion per day this year, for a total of $382 billion in 2023, reported Reuters. Oil production investment is projected to be $371 billion.

EV sales are projected to rise by one-third in 2023, following a jump last year, the press release said. Since 2021, sales of heat pumps worldwide have also grown by double digits.

New initiatives like the U.S. Inflation Reduction Act and policies in Europe, China, Japan and other countries, as well as phases of vigorous economic growth coupled with unstable fossil fuel prices have helped prompt investments in clean energy.

Oil and gas upstream spending is projected to increase by seven percent this year, primarily by large Middle Eastern national oil companies.

New fossil fuel investments will increase by six percent to $950 billion this year, according to the IEA report.

The increase in fossil fuel investments will lead to levels this year that are more than twice where they need to be in 2030 to be on track for the Net Zero Emissions by 2050 Scenario laid out by the IEA, the press release said.

Last year, demand for coal was at a record high. In 2023, investment in coal is on a trajectory for a six-fold increase over the levels forecast to reach net zero goals for 2030.

The largest green energy investment deficiencies were found to be in developing and emerging nations. Higher interest rates, weak grid infrastructure, high capital costs, obscure policy rules and strained utilities have hampered investments in renewables in those countries.

Cristen Hemingway Jaynes is a writer of fiction and nonfiction. She holds a JD and an Ocean & Coastal Law Certificate from University of Oregon School of Law and an MA in Creative Writing from Birkbeck, University of London. She is the author of the short story collection The Smallest of Entryways, as well as the travel biography, Ernest's Way: An International Journey Through Hemingway's Life.

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This post was previously published on Pressenza with a Creative Commons License.

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Filed Under: Business, Featured Content Tagged With: economies, energy, energy crisis, fossil fuel, Investment, oil, Pressenza