The energy transition is now seeing electrified transport outranking renewable energy as the largest recipient of investment, according to a report by BloombergNEF. Global clean tech spending has reached a record-breaking $1.8 trillion. However, despite this significant investment, it is still not enough to achieve the targets set in the Paris Agreement.
Investment in electrified transport experienced a substantial growth of 36%, reaching $634 billion in 2023. This represents more than a third of the total global investment in clean tech, surpassing the renewable energy sector, which received $623 billion in investment with a comparatively slower growth rate of 8%. Power grids came in third place with $310 billion in investment, highlighting their crucial role in facilitating the integration of new renewable energy sources.
The report attributes the slower growth rate of renewables to the declining costs of solar modules and Chinese wind turbines. Despite this, solar investment saw a modest 12% increase, amounting to $393 billion, while its capacity surged by 64%. Total wind investment reached a record high of $217 billion, with offshore wind securing $77 billion of financing despite challenging macroeconomic conditions. Onshore wind investment, however, dropped by 17% compared to the previous year.
Although the energy transition investment increased by 17%, Deputy CEO of BloombergNEF Albert Cheung emphasizes that it must grow by over 170% to achieve net-zero targets. Cheung expresses concern that while the clean energy sector is growing rapidly, it is still significantly off track.
China maintains its dominance in energy transition investment, accounting for 38% of the global total with $676 billion. However, its investment in renewable energy experienced an 11% decline, largely due to the decreasing cost of wind and solar equipment. In contrast, US renewables saw a remarkable 60% growth, driven by improved clarity in policy and reduced supply chain constraints in the solar industry.
The report also highlights the growing investment in the global clean energy supply chain, including equipment factories and battery metals production, which reached a new record of $135 billion. Additionally, this investment is expected to surge further in the next two years.
While electrified transport takes the lead in energy transition investment, it is evident that increased efforts are needed globally to accelerate the transition towards a sustainable future.
FAQs on Energy Transition and Clean Tech Investment
1. What is the current trend in clean tech investment?
Clean tech investment, which includes renewable energy and electrified transport, has reached a record-breaking $1.8 trillion. Electrified transport has surpassed renewable energy as the largest recipient of investment.
2. How much investment did electrified transport receive in 2023?
In 2023, electrified transport received $634 billion in investment, representing a growth rate of 36%.
3. How does the investment in renewable energy compare to electrified transport?
Renewable energy received $623 billion in investment, with a slower growth rate of 8%, making electrified transport the sector with the highest investment.
4. What role do power grids play in the energy transition?
Power grids received $310 billion in investment, highlighting their crucial role in integrating new renewable energy sources into the system.
5. Why has the growth rate of renewables slowed?
The decline in costs of solar modules and Chinese wind turbines has contributed to the slower growth rate of renewables.
6. Which countries are leading in energy transition investment?
China accounts for 38% of the global total investment in the energy transition, with $676 billion. However, its investment in renewable energy has declined due to decreasing costs. The US has seen a remarkable 60% growth in renewables investment.
7. How much investment went into the global clean energy supply chain?
Investment in the global clean energy supply chain, including equipment factories and battery metals production, reached a new record of $135 billion.
8. What is the outlook for future investment in clean tech?
Future investment in clean tech is expected to surge further in the next two years, particularly in the global clean energy supply chain.
– Renewable energy: Energy derived from sources that are naturally replenished, such as solar, wind, hydro, and geothermal power.
– Electrified transport: Refers to vehicles or transport systems that run on electricity, such as electric cars, trains, and buses.
– Power grids: Networks of power lines and related infrastructure that deliver electricity from power plants to consumers.
Suggested related link:
– BloombergNEF (official website of BloombergNEF, which provides insights and analysis on clean energy and sustainable business)