Briefly: Total investment in solar energy will surpass investment in oil production this year for the first time, according to the International Energy Agency’s (IEA) annual World Energy Investment report. Dr Fatih Biro, head of the IEA, described the development as a “striking, dramatic shift”.
The report also forecasts investment in all clean energy and tech to hit $1.7T this year, nearly double the total investment earmarked for all fossil fuels.
However, this shift isn’t yet global: around 80% of clean energy investment is happening in China plus a handful of advanced economies.
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So what’s driving this clean energy investment boom? The IEA says:
- 📈 Russia’s invasion of Ukraine has exacerbated energy security fears
- 📉 Tech advances have made clean energy more cost competitive, and
- 🏆 Governments are racing to secure a foothold in key clean energy technologies through initiatives like the US Inflation Reduction Act.
And what’s hampering clean energy investment elsewhere? The IEA says it’s due to:
- 💲 Higher interest rates
- 🤷 Unclear policies, and
- 🔌 Weak grid infrastructure.
Intrigue’s take: We’re often banging on here about how rapidly things are changing, and this latest IEA report offers plenty more evidence: e.g., for every dollar invested in fossil fuels, $1.70 is invested into clean energy. Just five years ago, this ratio was one-to-one.
And yet… the IEA says things still aren’t changing rapidly enough. In a remarkable line, the report says the oil and gas industry’s USD1.5T returned to shareholders since 2020 could’ve “fully covered the investment requirements in all clean fuels” globally until 2030.
So it seems the money and tech are there. The missing piece is just allocation.
Also worth noting:
- Energy-related carbon emissions grew by 0.9% last year to an all-time high of 36.8 billion tonnes.
- The IEA says coal investment this year is set to reach nearly six times the levels needed by 2030 for the world to be on track for net zero emissions.