Significant Increase in Clean Energy Investment Set to Double Fossil Fuel Spending in 2024

In 2024, global clean energy investment will hit $2 trillion, nearly double fossil fuel spending, driven by solar PV and electric vehicles.

Conal Cram

Global investment in clean energy is on track to reach $2 trillion in 2024, nearly twice the amount going to fossil fuels. This surge in clean energy investment, despite higher financing costs, marks a significant milestone in the transition to renewable energy. According to the International Energy Agency (IEA), this trend is driven by improving supply chains and lower costs for clean technologies.

Key Insights from the IEA Report

  • Total Energy Investment: In 2024, worldwide energy investment is expected to exceed $3 trillion for the first time, with clean technologies receiving two-thirds of this amount. This includes renewables, electric vehicles, nuclear power, grids, storage, low-emission fuels, efficiency improvements, and heat pumps.
  • Clean Technologies Leading the Way: The surge in clean energy investment is transforming the energy landscape. Investments in renewable power and grids overtook fossil fuel spending for the first time in 2023.
  • Solar PV Dominance: Solar PV investment is set to grow to $500 billion in 2024, surpassing all other electricity generation technologies combined. The report highlights that more money is now going into solar PV than any other electricity generation technology.

Regional Highlights

  • China: China is set to account for the largest share of clean energy investment in 2024, reaching an estimated $675 billion. This results from strong domestic demand across three key industries – solar, lithium batteries, and electric vehicles.
  • Europe and the US: Following China, Europe will invest $370 billion, and the US $315 billion in clean energy technologies. 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.
  • Emerging Economies: Clean energy spending in emerging economies, led by India and Brazil, will exceed $300 billion for the first time. However, this still accounts for only about 15% of global clean energy investment, far below what is required to meet growing energy demand in these countries. High financing costs continue to hinder the development of new projects in these regions.

Challenges and Imbalances

The IEA report warns of major imbalances and shortfalls in energy investment flows in many parts of the world. Despite the rise in clean energy investment, the low level of spending in emerging and developing economies remains a significant concern. The high cost of capital is a major barrier, holding back the development of new projects.

The Role of Industrial Policy

IEA Executive Director Fatih Birol emphasizes the importance of industrial policy in driving clean energy investment. He stated:

“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.”

Birol further stressed the need for targeted investments, particularly in developing economies where access to affordable, sustainable, and secure energy is severely lacking.

The Future of Clean Energy

The transition to clean energy is gaining momentum, with solar PV leading the charge. As costs continue to fall and supply chains improve, investment in clean energy technologies is expected to rise, contributing to a sustainable and secure global energy future. The report projects that investment in solar PV alone will grow to $500 billion in 2024, driven by falling module prices.

What Does the Future Hold for Global Energy Equity?

The IEA’s latest report on clean energy investment highlights both the progress made and the challenges that remain. As we move towards a cleaner energy future, the significant investments in renewable technologies, electric vehicles, and energy storage are promising signs. However, addressing the imbalances in investment, particularly in emerging economies, will be crucial to meeting global energy demands sustainably.

What are your thoughts on the future of clean energy investment? Do you believe we are on the right track? Share your thoughts in the comments below!

Photo by Frédéric Paulussen on Unsplash

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Conal is a seasoned tech industry professional and content writer for numerous tech publications. With a strong background in software engineering and digital media development, he's passionate about sharing the latest updates and insights in the tech industry, particularly in artificial intelligence and other disruptive trends. In his spare time he loves a mezze platter and a good film, and if he's not playing Fortnite or spending time with his daughter you can assume he's at the dry slopes!
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