Over $1.7tn to be invested in clean energy sources worldwide in 2023, IEA says

A staggering amount of approximately $2.8 trillion is expected to be invested in the energy sector globally in 2023, Trend reports.

Of this volume, over $1.7 trillion will be directed towards clean energy initiatives, encompassing a wide range of areas such as renewable power, nuclear energy, grid infrastructure, energy storage, low-emission fuels, efficiency enhancements, and the expansion of end-use renewables and electrification projects, the International Energy Agency (IEA) anticipates.

"The recovery from the slump caused by the COVID-19 pandemic and the response to the global energy crisis have provided a significant boost to clean energy investment. Comparing our estimates for 2023 with the data for 2021, annual clean energy investment has risen much faster than investment in fossil fuels over this period (24 percent vs 15 percent)," the agency said.

While the majority of the investment is dedicated to clean energy, slightly over $1 trillion will still be allocated to unabated fossil fuel supply and power. Within this, approximately 15 percent will be directed towards coal, with the remainder being allocated to oil and gas sectors. This allocation highlights the ongoing significance of traditional fossil fuel resources in the global energy mix, despite efforts to shift towards cleaner alternatives.

Interestingly, recent trends indicate a growing recognition of the need for a balanced approach to energy investment. For every $1 spent on fossil fuels, there is an increasing emphasis on allocating significant portions to clean energy projects, reflecting the global commitment to sustainable development and the pursuit of a greener future.

"Clean energy investments have been boosted by a variety of factors. These include improved economics at a time of high and volatile fossil fuel prices; enhanced policy support through instruments like the US Inflation Reduction Act and new initiatives in Europe, Japan, the People's Republic of China (hereafter "China") and elsewhere; a strong alignment of climate and energy security goals, especially in import-dependent economies; and a focus on industrial strategy as countries seek to strengthen their footholds in the emerging clean energy economy," the agency added.