net-zero.vision
Receive every month a list of newly covered startups in our newsletter
Discover NEW cleantech startups every month
Discover NEW cleantech startups every month
According to the annual report from the International Energy Agency (IEA), investment in renewable energies rose sharply last year, but there is still a risk of disparity between developed countries and the rest of the world. In addition, investment in fossil fuels remains at too high a level.
The IEA's recently published 2023 report highlights the growth in global investment in renewable energy. This year, investment in solar energy is expected to overtake that in the oil industry for the first time, reaching a symbolic milestone. It is estimated that more than $1 billion a day will be spent on developing solar projects in 2023, giving a total investment of $382 billion for the year, surpassing the $371 billion allocated to the oil industry. Ten years ago, the situation was quite the opposite, with investment of $636 billion in oil and just $127 billion in solar.
However, there are significant geographical imbalances. In general, the energy shock has accelerated investment in low-carbon energies. Investments in decarbonised technologies are expected to reach a total of $1,700 billion this year, while fossil fuels (oil, gas, coal, etc.) will attract around $1,000 billion. In total, investment in the energy sector will reach a record level of around 2,800 billion dollars this year.
Investment in renewable energies has been boosted by various initiatives, such as the Inflation Reduction Act in the United States, which facilitates and subsidises the installation of solar, wind or green hydrogen projects on American territory. Support programmes for renewable energies in China and Europe have also contributed to this trend. Overall, over the period 2021-2023, investment in renewable energy is expected to increase by 24% per year.
However, this does not mean that the world is ready for a complete transition to decarbonised energy. As IEA Chief Economist Tim Gould points out, many obstacles remain: high barriers to entry into the renewable energy market, regulatory challenges, difficulties with permitting and logistics, etc. The report also highlights the risk of a real divide between rich countries and the rest of the world. More than 90% of investments in decarbonised energies are made by developed countries and China. The IEA stresses the existence of hubs elsewhere, such as India, Brazil, China, and the United States.