Global spending on clean energy technologies and related infrastructure is on track to hit US$2 trillion in 2024 even as higher financing costs impede new projects, according to a recent report
China is set to account for the largest share of clean energy investment in 2024, reaching an estimated US$675 billion, finds the International Energy Agency (IEA) report. This is expected to come from strong domestic demand across three industries, namely solar, lithium batteries and electric vehicles.
Europe and the United States follow China, with clean energy investment of US$370 billion and US$315 billion respectively. These three major economies alone make up more than two-thirds of global clean energy investment, underlining the disparities in international capital flows into energy.
Notably the emerging and developing economies are now gaining investment footholds. The IEA says that for the first time total energy investment worldwide is expected to exceed US$3 trillion in 2024.
Major imbalances
About US$2 trillion is going towards clean technologies, including nuclear power, grids, storage, low-emission fuels, efficiency improvements and heat pumps. The remainder of slightly over US$1 trillion, is set to be allocated to coal, gas and oil.
More money is now going into solar photovoltaic (PV) technology than all other electricity generation technologies combined. In 2024, investment in solar PV tech is set to grow to US$500 billion as falling module prices induce new investment.
Even with such robust investment flows, the lack of contemporary grids and electricity storage has been a significant constraint on clean energy transitions in emerging markets.
This bottleneck could now begin to be eased as spending on grid infrastructure is rising and is set to reach US$400 billion in 2024, having been stuck at around US$300 billion annually between 2015 and 2021.
However, the report warns, there are still major imbalances and shortfalls in energy investment flows in many parts of the world. The low level of clean energy spending in emerging and developing economies outside of China is highlighted, with the share of global clean energy investment in those countries set to account for only around 15% of global spending.
