Clear Power Spending Will Surpass $2 Trillion This Yr
Investments in carbon-free power might be twice as giant as fossil gas spending in 2024, the Worldwide Power Company predicts
Technicians from CP Photo voltaic work on the upkeep of photo voltaic panels at {a partially} solar-powered manufacturing unit within the industrial space of Nairobi, on October 9, 2023. Renewable power sources generate over 80 % of Kenya’s electrical energy.
Luis Tato/AFP by way of Getty Photos
CLIMATEWIRE | Clear power is on fireplace.
World spending on renewables, nuclear, power effectivity and low-emissions fuels like hydrogen is ready to eclipse $2 trillion in 2024, double the $1 trillion spent on fossil fuels, based on the Worldwide Power Company’s annual assessment of world power spending.
The transformation is especially robust within the energy sector, the place worldwide funding in photo voltaic ($500 billion) is ready to exceed spending on all different types of energy technology mixed.
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The IEA’s annual World Power Funding report is carefully tracked by trade analysts as a number one indicator for traits within the power trade. This yr’s report predicts that spending on clear power will develop by nearly 6 %, up from almost $1.9 trillion in 2023.
The report additionally notes an uptick in clear power spending in rising markets, a crucial growth for reaching the world’s local weather targets. And it gives proof that the wave in inexperienced power spending sought by President Joe Biden, with passage of the Inflation Discount Act in 2022, is beginning to take root. U.S. spending on clear power is projected to extend by $300 billion this yr.
The findings are notably notable as a result of they arrive at a time when excessive rates of interest threaten to stymie the growth of cleaner power sources. However the influence of upper borrowing prices has been offset by easing provide chain constraints and continued price declines in renewable power applied sciences, the IEA mentioned.
“Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy,” IEA Govt Director Fatih Birol mentioned in a press release. “For every dollar going to fossil fuels today, almost two dollars are invested in clean energy.”
But significant challenges remain. The report notes that the biggest increase in new coal capacity occurred last year since 2015. Spending on oil and gas production, meanwhile, is on track to increase 7 percent to $570 billion. And while clean energy spending continues to grow, it is not happening fast enough to limit global temperature rise to 1.5 degrees Celsius.
IEA reckons that the current level of spending is enough to achieve two-thirds of the investment needed to triple renewable capacity by the end of the decade, as agreed to by negotiators at global climate talks in Dubai, United Arab Emirates, last year.
In emerging markets, energy spending is on track to approach $320 billion this year. That represents a 50 percent increase over 2020 levels and suggests new policy measures intended to green the energy supply are starting to take root. But despite the growth, emerging markets only account for 15 percent of global clean energy spending. That figure will have to increase if the world is to have any hope of reaching its climate goals, the IEA said.
“Extra have to be completed to make sure that funding reaches the locations the place it’s wanted most, specifically the creating economies the place entry to inexpensive, sustainable and safe power is severely missing as we speak,” Birol said.
Renewables are expected to account for the largest portion of clean energy spending in 2024, at $771 billion. That would be up from $735 billion last year and $446 billion in 2020. Investments in energy efficiency measures are expected to hit $669 billion, up from $646 billion last year, while grid and storage investments are project to grow from $416 billion in 2023 to $452 billion this year.
Reprinted from E&E Information with permission from POLITICO, LLC. Copyright 2024. E&E Information gives important information for power and setting professionals.
