The International Energy Agency (IEA) has published its next annual report on global investments in the energy sector, World Energy Investment 2021.
In 2020, the IEA estimates that investments in RES electricity amounted to USD 359 billion, more than three times more than in fossil fuel-based generation (USD 113 billion).
Global investments in renewable energy sources exceed (both in 2020 and, as forecasted, in 2021) investments in the production (upstream) of oil and gas.
As the world gradually recovers from COVID-19, global investment in the energy sector will grow by almost 10% to $ 1.9 trillion in 2021, and global energy demand will increase by 4.6%. This more than makes up for the 4% drop in 2020.
Of this amount, according to the IEA, global investments in the electricity sector will amount to more than $ 820 billion, which will be spent on new generation capacity, networks and energy storage. This is 5% more than last year. Renewables, led by solar, are likely to attract 70% of the $ 530 billion that is expected to go towards new generating capacity.
According to the authors of the report, investments in solar photovoltaic systems in 2021 will exceed investments in wind energy, thanks to the competitiveness and a large portfolio of projects participating in competitive tenders and corporate power purchase agreements (PPAs). Solar investment is projected to grow by more than 10% in China, India, the United States and Europe.
“With rapid technology improvements and cost savings, a dollar spent on deploying wind and solar PV today generates four times more electricity than a dollar spent on the same technology a decade ago,” the report said.
At the same time, the report notes a “sharp drop” in construction permits for new coal-fired power plants.
Major oil and gas companies are diversifying their investments, but changes are slow. It is estimated that investments in clean energy are increasing from the traditional 1% to 4% this year on average, with only a few leading European companies reaching a share in excess of 10%.
Much more resources need to be mobilized and channeled towards clean energy technologies to put the world on track to achieve zero emissions by 2050, as outlined in the recently released Emissions Zero by 2050 report, IEA chief Fatih Birol said. The roadmap in this report recommends the installation of 630 GW of solar power plants per year by 2030.
In 2021, $ 750 billion is likely to be invested in clean energy technologies and energy efficiency, but the IEA believes it needs to be doubled in the 2020s to limit global temperature increases to well below 2 ° C, and more than three times so that the “door is open” to stabilize at 1.5 ° C.
“Clear policy signals from governments will reduce the uncertainty associated with clean energy investments and provide investors with the long-term vision they need,” explained Fatih Birol. “Our roadmap shows that there are tremendous opportunities for companies, investors, employees and entire economies to move towards zero emissions. Governments have the capacity to unleash these broad benefits. ”