Global clean energy investment set to rise $1.7 trillion in 2023: IEA

New Delhi: The global investment in clean energy is set to rise to USD 1.7 trillion in 2023, as per the IEA’s latest World Energy Investment report, highlighting a surge in clean energy development that will help curb global emissions if the trend persists.

The report also mentioned that Solar power investment is set to outstrip spending on oil production this year for the first time in 2023.

About $ 2.8 trillion is set to be invested globally in energy in 2023, of which more than USD 1.7 trillion is expected to go to clean technologies, according to the IEA report.

The remainder, slightly more than USD 1 trillion, is going to coal, gas and oil.

But more than 90 per cent of this increase comes from advanced economies and China, presenting a serious risk of new dividing lines in global energy if clean energy transitions don’t pick up elsewhere, the report suggested.

“Annual clean energy investment is expected to rise by 24% between 2021 and 2023, driven by renewables and electric vehicles, compared with a 15% rise in fossil fuel investment over the same period” it said.

“Clean energy is moving fast – faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA.

Making remarks on the report, executive Director Fatih Birol said “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time”.

Birol said a “new global clean energy economy is emerging”, adding: “For a man like me who makes his hands dirty with data every single day this is a striking, dramatic shift.”

The IEA report said led by solar, low-emissions electricity technologies are expected to account for almost 90% of investment in power generation.

Clean energy investments have been boosted by a variety of factors in recent years, including periods of strong economic growth and volatile fossil fuel prices that raised concerns about energy security, especially following Russia’s invasion of Ukraine.

Enhanced policy support through major actions like the US Inflation Reduction Act and initiatives in Europe, Japan, China and elsewhere have also played a role.

Spending on upstream oil and gas is expected to rise by 7 per cent in 2023, taking it back to 2019 levels. The few oil companies that are investing more than before the Covid-19 pandemic are mostly large national oil companies in the Middle East.

Nonetheless, the expected rebound in fossil fuel investment means it is set to rise in 2023 to more than double the levels needed in 2030 in the IEA’s Net Zero Emissions by 2050 Scenario.

“Global coal demand reached an all-time high in 2022, and coal investment this year is on course to reach nearly six times the levels envisaged in 2030 in the Net Zero Scenario” said IEA.

“The oil and gas industry’s capital spending on low-emissions alternatives such as clean electricity, clean fuels and carbon capture technologies was less than 5% of its upstream spending in 2022. That level was little changed from last year – though the share is higher for some of the larger European companies” it said.