Author:
Ally Winning, European Editor, PSD
Date
06/12/2024
PDF
Ally Winning, European Editor, PSD
For the first time, investment in renewable energy is expected to be double that of investment in fossil fuels. That is according to a new report from the International Energy Agency (IEA), which estimated that this year global investment in clean energy will reach $2 trillion. The report highlighted that high financing costs may hinder these investments, however, better supply chains are forming and the costs of clean technologies are falling.
In 2024, global energy investment is predicted to reach $3 trillion for the first time. The $2 trillion funding for clean technologies will include renewable energy, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps. The fact that investment in clean energy is double that of fossil fuels is made more remarkable by last year being the first time that investment in renewable power and grids overtook the amount spent on fossil fuels.
“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,” said IEA Executive Director Fatih Birol. “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.”
The report stated that more money is now going into solar power than all other electricity generation technologies combined. It predicts that this year, solar investment will grow to $500 billion as falling module prices spur new investments.
It is predicted that China will be the largest spender in clean energy at $675 billion. Europe and the United States will spend $370 billion and $315 billion respectively. The clean energy spend from those three major economies will make up over two-thirds of global clean energy investment. Spending on grids is set to reach $400 billion in 2024, having been around $300 billion annually between 2015 and 2021. Investments in battery storage are set to reach $54 billion in 2024 as costs decrease.
Meanwhile, one of those previous investments in clean energy has now come to fruition. In June, China Green Electricity Investment of Tianjin switched on the 3.5 GW Midong PV farm in Urumqi, Xinjiang region. The investment in the solar farm totalled CNY 15.45 billion, just over US$2 billion. The infrastructure supporting the installation included 1.23 million supporting piles, 5 220 KV boosting stations and over 200 km of transmission lines. The new solar farm is now the largest in the world, taking over from the 2.2 GW facility operated by Huanghe Hydropower Development, also in China.
