Solar panels in a facility in England. According to IEA Executive Director Fatih Birol, investment in solar power is “set to surpass the volume of investment in oil production for the first time”.
Daniel Leal | AFP | Getty Images
Global investment in energy is expected to reach about $2.8 trillion in 2023, with more than $1.7 trillion of that going to clean energy technologies such as electric vehicles, renewables and storage, according to a new report from the International Energy Agency.
In a sign of how the energy transition is progressing, the IEA World Energy Investment report said solar investment is expected to attract more than $1 billion a day by 2023.
In a statement, Fatih Birol, the IEA’s executive director, said solar energy investment “was set to surpass the volume of investment in oil production for the first time”.
While advocates of the transition to a sustainable future will welcome the above, they are likely to be disappointed by the IEA’s projection that coal, gas and oil are still on track to attract “slightly more than” $1 trillion in investment this year.
“Today’s fossil fuel investment spending is now more than double the level needed in a net-zero emissions scenario by 2050,” the IEA report said.
“The discrepancy in coal is particularly striking: today’s investments are almost six times the requirements of the NZE scenario for 2030,” he added.
The impact 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 IEA report looms over the shadow of the Paris Agreement of 2015. The landmark agreement aims to “limit global warming well below 2, preferably 1.5 degrees Celsius, compared to pre-industrial levels”.
Reducing human carbon dioxide emissions to zero by 2050 is considered essential to meeting the 1.5 degree Celsius target.
Over the past few years, prominent figures such as UN Secretary-General Antonio Guterres have expressed their views on fossil fuels.
In June last year, Guterres slammed new funding for fossil fuel exploration. He described it as “delusional” and called for fossil fuel financing to be abandoned.
Despite these concerns, the oil and gas industry continues to develop projects around the world.
In October 2022, e.g. BP Boss Bernard Looney said his firm’s strategy was centered around investments in hydrocarbons and at the same time invest money in the planned energy transformation.
While there will be concerns about money flowing into fossil fuels, the IEA’s Birol was at pains to highlight what could be a significant move forward.
“Clean energy is advancing quickly – faster than many people realize,” he said in a statement released alongside the IEA report. “This is clear in investment trends where clean technologies are retreating from fossil fuels.”
“For every dollar invested in fossil fuels, about $1.7 is now going into clean energy,” Birol added, explaining that the ratio was one to one just five years ago.
Others commenting on the IEA report included Dave Jones, head of data insights at energy think tank Ember. “This crowns solar power as a true energy superpower,” he said.
“It is proving to be the biggest tool we have to rapidly decarbonise the entire economy, especially as solar energy is increasingly used to power cars instead 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 needs attention.”