According to the annual report “World Energy Investment Report 2024” released by the International Energy Agency (IEA), global investment in clean energy technology and infrastructure is expected to achieve USD 2 trillion in 2024 which is twice the amount going to fossil fuels.
- The report underlined the clean energy technologies that will receive investments from pool of USD 2 trillion are: renewable, electric vehicles, nuclear power, grids, storage, low-emission fuels, among others and the remaining part of investment will be directed towards gas, oil and coal.
- The report projected that total energy investment will breach the mark of USD 3 trillion for the 1st time in 2024.
Key Findings of World Investment Report 2024:
i.For the 1st time in 2023, the cumulative investment in renewable power and grids overtook the amount spent on fossil fuels.
ii.The report cautioned about the major imbalances and shortfalls in energy investment inflows in various parts of the world.
- It highlighted the low level of clean energy investment in Emerging Market and Developing Economies (EMDEs) outside China, which will exceed USD 300 billion in 2024 (up by more than 50% since 2020) led by India and Brazil.
- But, still the total share of global clean energy investment in EMDE (outside China) will remain at 15%,which far below what is required to meet the energy demands in many of these countries.
iii.The report highlighted that solar Photovoltaic (PV) will bring significant transformation in the power sector. It estimated that with solar PV, the combined investment in renewable and nuclear for electricity generation will increase to 10 times the amount going to fossil fuel-fired power in 2024.
- The investment in solar PV is expected to increase to USD 500 billion in2024 due to decrease in module prices which will further give boost to new investments.
iv.China with an estimated investment of USD 675 billion will account for the largest share of clean energy investment in 2024, followed by Europe and the United States of America (U.S.A.) with estimated investment of USD 370 billion and USD 315 billion respectively.
v.As per the report, global upstream oil and gas investment is expected to grow by 7% in 2024 to USD 570 billion, following a similar rise in 2023.
- This growth is mainly led by national oil companies in the Middle East and Asia.
Challenges to Achieve Clean Energy:
i.According to the report, clean energy investment by oil and gas companies reached USD 30 billion in 2023 which accounts for only 4% of the industry’s overall capital spending. Though, it is mainly aligned with the demand levels implied in 2030, but far higher than projected in global climates goals.
ii.While, Coal investment saw consistent increase, with over 50 GigaWatts(GW)of unabated coal-fired power approved in 2023 which is highest since 2015.
iii.Other than economic challenges, grid and electricity storage posed significant challenge on clean energy transitions.
About World Investment Report 2024:
i.The report provides a benchmark to track capital flows in the energy sector and examines how the investors are assessing risks and opportunities in different sectors such as: fuel and electricity supply, critical minerals, efficiency, research and development and energy finance.
ii.The latest edition of the report provides an elaborated analysis on the sources of investment and sources of finance in the energy sector.
iii.It also includes a new regional section which covers 10 major economies and regions.
About International Energy Agency (IEA):
Executive Director- Dr. Fatih Birol
Headquarters- Paris, France
Established in- 1974
