Global Energy Investment Set To Exceed USD 3 Trillion First Time In 2024 In 2023, each dollar invested in wind and solar PV yielded 2.5 times more energy output than a dollar spent on the same technologies a decade prior: IEA Report

Despite pressures on financing, the world now invest twice as much in clean energy as it does in fossil fuels, helped by improving supply chains and lower costs for clean technologies.

According to a new IEA report, released on Thursday, global energy investment is set to exceed USD 3 trillion for the first time in 2024, with USD 2 trillion going to clean energy technologies and infrastructure.

"Investment in clean energy has accelerated since 2020, and spending on renewable power, grids and storage is now higher than total spending on oil, gas, and coal," the report stated.

In 2024, the share of global clean energy investment in EMDE outside China is expected to remain around 15 per cent of the total.

Power sector investment in solar photovoltaic (PV) technology is projected to exceed USD 500 billion in 2024, surpassing all other generation sources combined. Though growth may moderate slightly in 2024 due to falling PV module prices, solar remains central to the power sector's transformation.

"In 2023, each dollar invested in wind and solar PV yielded 2.5 times more energy output than a dollar spent on the same technologies a decade prior," it added.

Clean energy spending by oil and gas companies grew to around USD 30 billion in 2023 (of which just USD 1.5 billion was by NOCs), but this represents less than 4 per cent of global capital investment on clean energy.

"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," Birol added.

Global upstream oil and gas investment is expected to increase by 7 per cent in 2024 to reach USD 570 billion, following a similar rise in 2023. The growth in spending in 2023 and 2024 is predominantly by national oil companies in the Middle East and Asia.

The report finds that oil and gas investment in 2024 is broadly aligned with the demand levels implied in 2030 by today's policy settings, but far higher than projected in scenarios that hit national or global climate goals. Clean energy investment by oil and gas companies reached USD 30 billion in 2023, accounting for only 4 per cent of the industry's overall capital spending, according to the report. Meanwhile, coal investment continues to rise, with more than 50 gigawatts of unabated coal-fired power approved in 2023, the highest since 2015.

In addition to economic challenges, grids and electricity storage have been a significant constraint on clean energy transitions. But spending on grids is rising and is set to reach USD 400 billion in 2024, having been stuck at around USD 300 billion annually between 2015 and 2021.