The International Energy Agency simply revealed its annual report on world funding in vitality, the place it tallies up all that money. The world noticed about $2.8 trillion of investments in vitality in 2022, with about $1.7 trillion of that going into clear vitality.
That’s the most important single-year funding in clear vitality ever, and the place it’s all going is fairly attention-grabbing. I’ve some excellent news, some dangerous information, and a few stunning tidbits to share. So seize some popcorn and let’s dive into the information.
Fossil fuels are faltering
Let’s begin with what I contemplate to be excellent news: there’s some huge cash going into clear vitality—together with renewables, nuclear, and issues that assist reduce emissions, like EVs and warmth pumps. And not solely is it some huge cash, however it’s greater than the quantity going towards fossil fuels. In 2022, for each greenback spent on fossil fuels, $1.70 went to wash vitality. Just 5 years in the past, it was lifeless even.
Clean vitality’s rising dominance is very clear with regards to solar energy. In 2023, for the primary time, funding in photo voltaic vitality is anticipated to beat out funding in oil manufacturing. It’s a stark distinction from what the image appeared like a decade in the past, when oil spending outpaced photo voltaic spending by almost six to 1.
While we’re on oil and fuel, I feel it’s price declaring one actually attention-grabbing level: whereas there’s some huge cash flowing to wash vitality, it doesn’t make up an enormous share of spending by fossil-fuel firms.
See these tiny darkish slivers in 2021 and 2022? That’s the share of oil and fuel firms’ spending that went towards clear vitality. Spending on oil infrastructure has fallen (which is what’s allowed photo voltaic to catch up), however firms are making up for it by paying out dividends, shopping for again inventory, and paying again debt quite than placing extra into low-emissions tech.
Any funding and a spotlight going to renewables and improvements that would assist reduce emissions is nice, and I do assume oil and fuel firms can play a job in boosting new applied sciences, particularly these the place they’ve experience (I’m taking a look at you, geothermal!). But I feel it’s essential to maintain that spending in context—oil and fuel firms are placing much less cash into renewables than advert campaigns would have you ever assume.
Bring it on
Within clear vitality, the overwhelming majority of spending goes into renewables like wind and photo voltaic, grid upgrades, and efforts to enhance vitality effectivity.