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Clean energy investment to double fossil fuels in 2024

Global clean energy investment in 2024 is expected to reach $2 trillion, double the amount spent on fossil fuels, according to the International Energy Agency

Global investment in clean energy is projected to nearly double the amount going into fossil fuels in 2024, according to the International Energy Agency (IEA).

The anticipated spending on clean energy technologies and infrastructure is set to reach $2 trillion (£1.5tn), out of a total energy investment of over $3 trillion (£2.3tn) worldwide.

The IEA’s World Energy Investment report indicates that this significant investment will go towards renewables, electric vehicles, nuclear power, grids, storage, low emissions fuels, efficiency improvements and heat pumps.

Fossil fuel investment, comprising coal, gas and oil, is expected to receive just over $1 trillion (£780bn).

This trend follows 2023 when investment in renewable power and grids surpassed fossil fuel spending for the first time.

Despite this growth, the report points to persistent imbalances and shortages in energy investment, especially in emerging and developing economies outside China.

Investment in these regions is projected to exceed $300 billion (£234bn), with India and Brazil leading the way.

However, this figure represents only about 15% of the global clean energy investment, insufficient to meet the rising energy demands, as high capital costs hinder new projects.

The report underscores that since the Paris Agreement in 2015, investment in renewables and nuclear energy for electricity generation has grown significantly.

In 2024, it is expected to be ten times the investment in fossil fuel power, with solar photovoltaic (PV) leading the transformation. Investment in solar PV alone is set to reach $500 billion (£390bn) due to falling module prices.

China is expected to be the largest investor in clean energy in 2024, with $675 billion (£527bn), driven by domestic demand for solar, lithium batteries, and electric vehicles. Europe and the US follow with $370 billion (£289bn) and $315 billion (£246bn), respectively, highlighting the disparity in global clean energy investment.

Upstream oil and gas investment is forecast to increase by 7% in 2024 to $570 billion (£445bn), led by national oil companies in the Middle East and Asia.

Although oil and gas investments align with current policy-driven demand levels for 2030, they exceed the targets needed for national or global climate goals.

Clean energy investment by oil and gas companies amounted to $30 billion (£23.4bn) in 2023, a mere 4% of the industry’s capital spending.

Coal investment also continues to rise, with over 50 gigawatts of new coal-fired power approved in 2023, the highest since 2015.

Grids and electricity storage have been significant constraints on clean energy transitions.

However, spending on grids is increasing, expected to reach $400 billion (£312) in 2024 due to new policy initiatives in Europe, the US, China and some Latin American countries.

Investment in battery storage is also rising, projected to hit $54 billion (£42.2) in 2024, although it remains concentrated, with only one cent invested in emerging economies for every dollar spent in advanced economies and China.

IEA Executive Director Fatih Birol said: “Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy.

“For every dollar going to fossil fuels today, almost two dollars are invested in clean energy.

“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security.

“But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains.

“More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”

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