Solar investment to outpace oil spending for the first time - IEA

Global investment in clean energy will outstrip spending on fossil fuels this year, with investments in solar expected to surpass those in oil production for the first time ever, the International Energy Agency (IEA) says in a new report.

About USD 1.7 trillion (EUR 1.58tr) is forecast to go for renewables, energy storage, nuclear and other clean energy projects in 2023, accounting for a major chunk of the USD-2.8-trillion overall energy investments anticipated this year. Slightly more than USD 1 trillion is seen to be allocated for coal, gas and oil, according to IEA’s World Energy Investment report released last week.

The major growth drivers for clean energy are strong economic growth and volatile fossil fuel prices and, most notably, concerns about energy security that were spurred following the war in Ukraine. The projections show that annual investment in renewable energy is set to increase by 24% in the 2021-2023 period, as compared to 15%-growth for fossil fuels. In 2023 alone, investment in solar power is expected to hit USD 380 billion.

“Clean energy is moving fast – faster than many people realise,” said IEA’s executive director Fatih Birol.

Regardless of the global investment peak, IEA warned that fossil fuel investment is not slowing fast enough in order for the 2050 net-zero emissions goal to be reached. Spending on upstream oil and gas, meanwhile, is projected to grow by 7% in 2023 as national oil companies in the Middle East have rushed to invest more than they did before the pandemic.

Talking about hazards, the watchdog also pointed out that advanced economies and China were responsible for more than 90% of new investment in renewables since 2021, which poses “a serious risk of new dividing lines in global energy if clean energy transitions don’t pick up elsewhere.” Still, upward trends are being witnessed in a handful of markets, including India, Brazil and parts of the Middle East.

(USD 1.0 = EUR 0.930)

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