May 25, 2023 - Energy & Environment

"Clean" energy spending is outpacing fossil fuels

Global energy investment in clean energy and fossil fuels
Data: International Energy Agency; Chart: Axios Visuals

Investment in climate-friendly energy is extending its lead over fossil fuels, yet spending trends in both buckets are out of step with Paris Agreement goals, a new report finds.

Driving the news: The International Energy Agency just dropped its latest annual look at investments in "clean" and fossil energy.

  • "Clean" includes wind, solar, batteries, EVs, nuclear, efficiency, grid tech and carbon capture.

🧮 One wild stat: IEA sees 2023 solar investment, at $380 billion, outpacing oil exploration and production spending for the first time.

  • The comparison is limited — transportation and other markets are far bigger sources of oil demand than power.
  • But it encapsulates wider trends afoot. Also, the lines between transport fuels and power are blurring as EVs rise.

The big picture: Russia's invasion of Ukraine has boosted clean energy, even as it prompted a near-term "scramble" for oil and gas, IEA finds.

  • The oil and gas sector is boosting investment in exploration and production — but not compared with high profits.
  • Forces including investor pressure for returns, and questions about long-term demand, mean that "only large Middle Eastern national oil companies are spending much more in 2023 than they did in 2022."

Threat level: The overall picture is mixed.

  • "Clean" investment is growing, but the world is behind the eight ball on the emissions cuts needed for Paris goals.
  • If you look at IEA's hypothetical pathway to net-zero emissions by 2050, investment in only a "handful" of technologies — including solar and battery storage — is on track.
  • Meanwhile, "coal investment this year is on course to reach nearly six times the levels envisaged in 2030 in the Net Zero Scenario," IEA notes.

Read the full report.

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