Clean energy investment grows to meet climate goals
Countries’ efforts to meet climate targets are paying off. The IEA estimates that investment in clean energy will surpass conventional energy in 2024. This confirms the growing interest in renewable energy and the infrastructure to support it.
Overall market trends
The IEA forecasts that global investment in clean energy will reach USD 2 trillion in 2024. This is double the oil, gas, and coal investment analysts expect.
China will account for the largest sector investment share – USD 675 billion. Growing demand in the following sectors is driving this activity:
– solar energy;
– lithium batteries;
– electric vehicle manufacturing.
US investment is likely to be around USD 315 billion. The estimate for European investment is USD 370 billion.
Overall, investment in the energy sector will exceed USD 3 trillion. About 60% of this amount will go to issues like:
– development of renewable sources;
– production of electric cars;
– nuclear power;
– storage facilities and networks for transporting resources.
According to IEA Director Fatih Birol, investment in renewable energy sources is growing rapidly. At the same time, interest in fossil fuels is declining. One of the reasons for the increased focus on green energy is the strengthening of the global economy. In addition, the sector is developing, which makes it possible to reduce the costs of maintaining and transporting resources.
Energy security issues also play an important role. Rising oil and gas prices and market instability in general favour the development of renewable energy sources.
Analysts say clean energy is cheaper than the conventional sector. This includes the manufacture and installation of solar panels or components for them. The stabilisation of supply chains also has a positive effect. Nevertheless, financing for a number of renewable energy projects is coming under pressure from high interest rates. Investment in the sector is also growing strongly, fuelled by efforts to reduce emissions.
Sectors overview
The most attractive sector for investors is solar power. Analysts estimate that spending will reach USD 500 billion in 2024. Investment in grid infrastructure is estimated at around USD 400 bn and energy storage at more than USD 50 bn.
The IEA notes an increase in investment in nuclear power. It currently accounts for 9% of the total market.
In the offshore energy sector, there are opposing trends. Several projects got cancelled this year due to increased costs and difficulties in obtaining permits. However, a review of the regulatory framework and contracts in the EU could change this situation.
