Clean Energy Investment set to surpass Fossil Fuels by 2021.

By Oliver Townsend Jun 6, 2024
Clean Energy Investment to Double Fossil Fuels in 2021.jpegOrginal image from: https://www.miragenews.com/clean-energy-investment-to-double-fossil-fuels-1250714/

Investing in clean energy is becoming increasingly popular as global investment in clean energy is set to double the amount going to fossil fuels in 2021. This shift is fueled by advancements in supply chains and decreasing costs of clean technologies. According to a recent report from the International Energy Agency (IEA), the total energy investment worldwide is projected to exceed $3 trillion in 2021, with $2 trillion allocated to clean technologies including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements, and heat pumps.

The Rise of Clean Energy Investment

In 2023, the combined investment in renewable power and grids surpassed the amount spent on fossil fuels for the first time. This trend is expected to continue in 2021, with nearly double the investment in clean energy compared to fossil fuels. The report highlights the significant growth in clean energy spending in emerging and developing economies, particularly in countries like India and Brazil. However, there is still a gap in meeting the energy demand in these regions due to high capital costs hindering new project development.

Challenges and Opportunities

Despite the positive momentum in clean energy investment, there are still challenges and imbalances in energy investment flows around the world. The report emphasizes the need for more investment in developing economies to ensure access to affordable, sustainable, and secure energy. Major economies are competing to establish dominance in clean energy supply chains, driving the increase in clean energy spending globally.

China Leads in Clean Energy Investment

China is expected to lead the clean energy investment in 2021, with an estimated $675 billion allocated to clean energy projects. This growth is driven by domestic demand for solar, lithium batteries, and electric vehicles. Following China, Europe and the United States are also significant contributors to global clean energy investment, collectively representing more than two-thirds of the total investment.

Impact on Oil and Gas Investment

While clean energy investment is on the rise, global upstream oil and gas investment is also expected to increase in 2021. However, the report notes that oil and gas investment levels are higher than what is projected to align with national or global climate goals. Clean energy investment by oil and gas companies remains relatively low, indicating a shift towards cleaner energy alternatives.

Driving Factors for Clean Energy Investment

The report underscores the economic benefits, cost reductions, and energy security considerations driving the increase in clean energy spending. The rise of solar PV as a leading electricity generation technology highlights the transformation of the power sector towards renewable energy sources. Investments in grids and electricity storage are also increasing, signaling a shift towards a more resilient and sustainable energy infrastructure.

Conclusion

The surge in clean energy investment in 2021 reflects a global shift towards sustainable and renewable energy sources. While challenges remain in balancing energy investment flows and meeting the needs of developing economies, the momentum behind clean energy investment is promising. By prioritizing investments in clean technologies and addressing the gaps in energy access, the world can move closer to a more sustainable and secure energy future.

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