Global investment in clean energy is on course to rise to USD 1.7 trillion in 2023, with solar set to eclipse oil production for the first time


According to a report by the magazine, investments in clean energy are outpacing spending on fossil fuels as concerns about affordability and energy security are driving the momentum toward sustainable options International Energy Agency (IEA). According to the report, global clean energy investment is expected to reach $1.7 trillion in 2023, surpassing $1 trillion in coal, gas and oil investments. The report also highlights the significant growth in annual clean energy investment, which is expected to increase by 24% between 2021 and 2023, compared to a 15% increase in fossil fuel investment over the same period.
The increase in clean energy investment is mainly driven by renewable energy and electric vehicles, with advanced economies and China accounting for more than 90% of the increase. The IEA Executive Director, Fatih Birol, underscored the speed at which clean energy is advancing, with the ratio of clean energy investments to fossil fuels now standing at 1.7 to 1, compared to a one to one ratio five years ago. Investments in solar energy are particularly noteworthy as they are expected to outpace investments in oil production for the first time.
It is estimated that low-emission power technologies, led by solar energy, will account for almost 90% of investments in power generation. Consumers are also contributing to the growth in clean energy investment through increased purchases of heat pumps and electric vehicles, with EV sales expected to increase by a third in 2023.
Several factors have contributed to the surge in clean energy investment, including strong economic growth, volatile fossil fuel prices, and energy security concerns, particularly in the wake of geopolitical events. Political support, such as initiatives in the US, Europe, Japan, China and elsewhere, has also played an important role in encouraging clean energy investment.
However, the report underscores the need for increased investment in clean energy in emerging and developing countries. While countries like India, Brazil and parts of the Middle East have shown promising investments in solar and renewable energy, many other countries face challenges such as high interest rates, unclear political frameworks, weak grid infrastructure and financially strained utilities. The international community is called upon to encourage investment in low-income economies where the private sector has been reluctant to invest.
Although fossil fuel investments are expected to pick up again in 2023 and exceed levels required for the IEA’s net-zero emissions by 2050 scenario, the report underscores the urgency of the clean energy transition and reduction of emissions Dependence on fossil fuels. Record high global coal demand in 2022 and projected coal investments for 2023 underscore the need for an accelerated clean energy transition to meet climate targets.
The report emphasizes that the growing clean energy investment gap between developed countries and other regions poses a risk to the global energy transition. Addressing this imbalance and increasing investment in clean energy around the world is crucial to combating climate change and ensuring a sustainable energy future.

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