New Delhi: Global energy investment is set to increase by 8 percent in 2022 to reach $ 2.4 trillion, with the anticipated rise coming mainly in clean energy, according to World Energy Investment 2022 report by the International Energy Agency (IEA).
“The fastest growth in energy investment is coming from the power sector mainly in renewables and grids” said the report.
The report however, said the growth investment is still far from enough to tackle the multiple dimensions of today’s energy crisis and pave the way towards a cleaner and more secure energy future.
The rise in clean energy spending is not evenly spread, however, with most of it taking place in advanced economies and China. And in some markets, energy security concerns and high prices are prompting higher investment in fossil fuel supplies, most notably on coal.
“We cannot afford to ignore either today’s global energy crisis or the climate crisis, but the good news is that we do not need to choose between them – we can tackle both at the same time,” said IEA Executive Director Fatih Birol.
“A massive surge in investment to accelerate clean energy transitions is the only lasting solution. This kind of investment is rising, but we need a much faster increase to ease the pressure on consumers from high fossil fuel prices, make our energy systems more secure, and get the world on track to reach our climate goals” he added.
“Clean energy investment grew by only 2 per cent a year in the five years after the Paris Agreement was signed in 2015. But since 2020, the pace of growth has accelerated significantly to 12 percent” the report mentioned.
Spending has been underpinned by fiscal support from governments and aided by the rise of sustainable finance, especially in advanced economies. Renewables, grids and storage now account for more than 80 per cent of total power sector investment.
“Spending on solar PV, batteries and electric vehicles is now growing at rates consistent with reaching global net zero emissions by 2050” it said.
Talking about the spending on some emerging technologies, the report said there is rapid growth underway in spending , notably batteries, low emissions hydrogen, and carbon capture utilisation and storage. Investment in battery energy storage is expected to more than double to reach almost $20 billion in 2022.
However, despite some bright spots, such as solar in India, clean energy spending in emerging and developing economies remains stuck at 2015 levels, with no increase since the Paris Agreement was reached.
The report also raised concerns over investment in coal supply led by emerging economies in Asia, It said there is 10 percent rise in investment on coal supply in 2021, with a similar increase likely in 2022.
On the impact of Rissia’s invasion of Ukraine the report said it has pushed up energy prices for many consumers and businesses around the world, hurting households, industries and entire economies
“Today’s high fossil fuel prices are generating pain for many economies but are also generating an unprecedented windfall for oil and gas producers. Global oil and gas sector income is set to jump to $4 trillion in 2022, more than twice its five-year average, with the bulk of it going to major oil and gas exporting states” it said.
“Overall, clean energy investment accounts for around 5 percent of oil and gas company capital expenditure worldwide, up from 1 percent in 2019” IEA said.
