Global investment in low-carbon electricity will rise to 10 times as much as fossil fuel power this year due to an increase in spending on solar projects, according to the International Energy Agency.
The global energy watchdog has predicted that investment in clean energy including renewables and nuclear power as well as electric vehicles, power grids, energy storage, low-emissions fuels, efficiency improvements and heat pumps will reach $2tn this year.
The global clean energy investment figure, which topped fossil fuels for the first time last year, is likely to be double the $1tn forecast for coal, gas and oil in 2024, the IEA said.
“For every dollar going to fossil fuels today, almost $2 are invested in clean energy,” said the IEA’s executive director, Fatih Birol.
However, spending on oil and gas is still too high to meet the world’s climate targets, according to Birol. Climate experts have warned that global climate targets will not be met if new investments are made into fossil fuels.
Global coal investments have continued to rise, with more than 50GW of unabated coal-fired power approved last year, the highest since 2015.
Global oil and gas investments are expected to increase by 7% in 2024 to reach $570bn, after a similar rise in 2023, led predominantly by state-owned oil companies in the Middle East and Asia, according to the report.
These investments are broadly aligned with the forecast energy demand levels for 2030 based on current policies, but they are far higher than would be needed according to forecast models in which the world meet its climate goals, the IEA warned.
Birol said oil and gas companies are “claiming to be part of the solution” but are continuing to spend on average just 4% of their investment budgets on clean energy projects, while national oil companies spend even less.
The warning comes days after a separate IEA report revealed that the world is off track to meet the goal of tripling renewable electricity generation by 2030, a target viewed as vital to enable a swift global transition away from fossil fuels, despite record investments.
Global clean energy investment has been driven by spending on solar farms, which is on track to reach $500bn this year, surpassing the investment in all other electricity generation technologies combined.
This has been fuelled by a 30% fall in solar technology costs in the last two years and a rapid roll out of solar farms across China, which built as much new capacity in 2023 as the entire world did the year before, the IEA said.
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“Solar power is entirely essential to the transformation of the global energy system,” Birol said.
Investment in low-carbon electricity – which includes renewables and nuclear power – is likely to reach more than $900bn this year, according to the report, 10 times higher than investment in gas and coal power generation.
The proportion of global investment has swung further towards clean electricity sources since 2015, the year global governments signed the Paris climate accord, when it was twice the amount invested in fossil fuel-fired power.
China is expected to lead the world in clean energy investment this year, reaching an estimated $675bn, through its investments in solar, lithium batteries and electric vehicles. Europe and the US are expected to invest $370bn and $315bn in clean energy respectively.
Birol warned that more must be done to ensure that clean energy investment reaches “the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today”.