Solar panels at a facility in England. According to IEA Executive Director Fatih Birol, investment in solar energy is “on the verge of exceeding the amount of investment in oil production for the first time”.
Daniel Leal | AFP | Getty Images
Global energy investment is expected to reach around $2.8 trillion in 2023, according to a new report from the International Energy Agency, of which more than $1.7 trillion is expected to be spent on energy technologies. clean energy such as electric vehicles, renewables and storage.
In a sign of progress in the energy transition, the IEA’s Global Energy Investment Report indicates that solar investments are expected to attract more than $1 billion per day in 2023.
In a statement, Fatih Birol, executive director of the IEA, said investment in solar power was “on the verge of exceeding the amount of investment in oil production for the first time”.
While proponents of transitioning to a sustainable future will welcome the above, they are likely to be discouraged by the IEA’s projection that coal, gas and oil are still on course to attract “a little more”. of 1,000 billion dollars of investments this year.
“Today’s capital expenditure on fossil fuels is now more than double the levels required in the net-zero emissions scenario by 2050,” the IEA report said.
“The misalignment for coal is particularly striking: current investments are nearly six times the 2030 requirements of the NZE scenario,” he added.
The effect of fossil fuels on the environment is considerable. The UN says that since the 19th century “human activities have been the main driver of climate change, mainly due to the burning of fossil fuels such as coal, oil and gas”.
The shadow of the 2015 Paris Agreement hangs over the IEA report. The landmark agreement aims to “limit global warming to well below 2, preferably 1.5 degrees Celsius, above pre-industrial levels”.
Reducing man-made carbon dioxide emissions to net zero by 2050 is seen as crucial to meeting the 1.5 degree Celsius target.
In recent years, high-profile figures such as UN Secretary-General Antonio Guterres have made their feelings about fossil fuels known.
In June last year, António Guterres slammed new funding for fossil fuel exploration. He called it “delusional” and called for the funding of fossil fuels to be abandoned.
Despite these concerns, the oil and gas industry continues to develop projects around the world.
In October 2022, for example, BP Chief Bernard Looney said his company’s strategy focused on investing in hydrocarbons while simultaneously pouring money into the planned energy transition.
Although there are concerns about the money being poured into fossil fuels, the IEA’s Birol sought to highlight what could be a big change in the future.
“Clean energy is moving fast – faster than many people realize,” he said in a statement released alongside the IEA report. “This is clearly evident in investment trends, where clean technologies are moving away from fossil fuels.”
“For every dollar invested in fossil fuels, about $1.7 is now spent on clean energy,” Birol added, explaining that this ratio was one to one just five years ago.
Other commentators on the IEA report include Dave Jones, head of data insights at energy think tank Ember. “This crowns solar as a true energy superpower,” he said.
“It emerges as the greatest tool we have for a rapid decarbonisation of the whole economy, especially as solar energy is increasingly used to power cars in place of oil”, he added.
“The irony remains that some of the sunniest places in the world have the lowest levels of solar investment, and this is an issue that deserves our attention.”