Investment in clean energy will extend its lead over spending on fossil fuels in 2023, with solar projects expected to outpace outlays on oil production for the first time.
Key points:
- In 2023, solar power spending is due to hit around $582 billion on a yearly basis
- Around $4.3 trillion is set to be invested in energy worldwide in 2023
- Investment in new fossil fuel supply will rise by 6 per cent in 2023 to $1.45 trillion
The International Energy Agency (IEA) said in it’s World Energy Investment report annual investment in renewable energy was up by nearly one-quarter since 2021 compared to a 15 per cent rise for fossil fuels.
Around 90 per cent of clean energy spending comes from advanced economies and China, however, highlighting the global divide between rich and poor countries as fossil fuel investment is still double the levels needed to reach net-zero emissions by mid-century.
“Clean energy is moving fast – faster than many people realise,” said the IEA’s executive director, Fatih Birol.
“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.”
Around $US2.8 trillion ($4.2 trillion) is set to be invested in energy worldwide in 2023, more than $US1.7 trillion ($2.6 trillion) of which is expected to go to renewables, nuclear power, electric vehicles, and efficiency improvements.
The rest of the money will go to oil, gas and coal, demand for the last of which will reach an all-time high, or six times the level needed in 2030 to reach net zero by 2050.
Current fossil fuel spending is significantly higher than what it should be to reach the goal of net zero by mid-century, the agency said.
In 2023, solar power spending is due to hit around $US380 billion ($582 billion) on a yearly basis.
“This crowns solar as a true energy superpower. It is emerging as the biggest tool we have for rapid decarbonisation of the entire economy,” said Dave Jones, head of data insights at renewable energy think tank Ember.
“The irony remains that some of the sunniest places in the world have the lowest levels of solar investment.”
The IEA also said investment in new fossil fuel supply will rise by 6 per cent in 2023 to $US950 billion ($1.45 trillion).
The agency did not expressly reiterate its blockbuster projection from 2021, that investors should not fund new oil, gas and coal supply projects if the world wants to reach net-zero emissions by mid-century.
Producer group OPEC (the Organisation of Petroleum Exporting Countries) said calls by the IEA to stop investing in oil undermine global energy security and growth.
Scientists and international climate activists have warned the fossil-fuel industry exacerbates the catastrophic impacts of climate change.
Reuters