The report marks a milestone as investments in renewable power and grid technologies had surpassed those in fossil fuels for the first time in 2023. The remainder of the investment, slightly over USD 1 trillion, will continue to flow into traditional energy sources like coal, gas, and oil.
IEA Executive Director Fatih Birol highlighted the enduring appeal of clean energy, stating, "Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy."
Despite the optimistic global outlook, the IEA report identified significant disparities, particularly in emerging and developing economies outside China. These regions are expected to see clean energy spending exceed USD 300 billion for the first time, led by nations such as India and Brazil. However, this investment still represents only about 15% of the global total, which is below what is needed to meet rising energy demands in these countries, where high capital costs impede new projects.
China dominates the clean energy investment landscape, projected to invest approximately USD 675 billion in 2024. This investment is driven by strong domestic demand in key industries including solar, lithium batteries, and electric vehicles. Following China, Europe and the United States are expected to invest USD 370 billion and USD 315 billion respectively, collectively accounting for more than two-thirds of the global investment in clean energy.
The report also underscores a significant increase in solar PV investment, set to reach USD 500 billion in 2024, as falling module prices stimulate new projects, making it the leading technology transforming the power sector.
Additionally, the global upstream oil and gas investment is expected to rise by 7% in 2024, reaching USD 570 billion, predominantly driven by national oil companies in the Middle East and Asia. Despite this growth, the investment in clean energy by oil and gas companies was only USD 30 billion in 2023, accounting for a mere 4% of their total capital expenditure.
The IEA also noted improvements in grid and battery storage investment, crucial for facilitating the clean energy transition. Investment in grids is anticipated to hit USD 400 billion in 2024, significantly up from the annual USD 300 billion recorded between 2015 and 2021. Investment in battery storage is expected to reach USD 54 billion in 2024, though this spending remains highly concentrated in advanced economies and China.
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