Global clean energy investment rose sharply in 2023, increasing 17% to $1.8 trillion, with particularly strong growth in electrified transport and emerging areas including hydrogen and carbon capture, according to a new report from BloombergNEF (BNEF).
Despite reaching record levels, however, the report noted that investment remains far below the levels needed to align with a Paris-aligned net zero scenario, which would require nearly tripling the average annual amount spent on clean energy by the end. of the decade, according to BNEF.
The biggest driver of investment growth in clean energy, according to the report, was electrified transport, including electric vehicles such as cars, buses, commercial vehicles, as well as related infrastructure, with investment in this area growing by 36% last year to $634 billion, and surpassing the title of largest renewable energy category, which grew a modest 8% to $623 billion.
While starting from a substantially smaller base, investment in several emerging clean energy categories grew sharply in 2023, including hydrogen, which tripled to $10.4 billion, carbon capture and storage (CCS), nearly doubling to more than 11 billion dollars, and energy storage, which increased by 76 billion dollars. % to US$36 billion.
By region, China was again by far the largest market for clean energy investment, with $676 billion, or 38% of the global total, according to BNEF. The report concluded, however, that China's lead over the rest of the world has declined, with faster growth in Europe and North America filling the gap, and with combined investment from the EU, the UK and the USA surpassing China by 718 billion dollars.
The EMEA region saw the fastest growth, with strong increases in Europe in solar, electric vehicles, hydrogen, CCS and clean industry driving a 38% regional increase in investment, while the Inflation Reduction Act helped trigger a jump 22% on investment in the USA. , which rose to US$303 billion.
The report also indicated substantial growth in investment in the clean energy supply chain, including clean technology equipment and battery metal mines and refineries, increasing to $135 billion in 2023 from $115 billion last year. previous, and almost tripling since 2020. According to BNEF, investment in the clean energy supply chain is expected to increase this year by 66%, driven by the battery gigafactory pipeline.
According to the BNEF report, clean energy supply chains are one of the only major areas of investment that are on track to meet the requirements of the net zero scenario by 2050. In contrast, average annual investment levels between 2024 and 2030 would need to be more than 2x higher for renewable energy, grids and energy storage, and almost 3x higher for electrified transport. In total, BNEF's net zero scenario indicates a need for annual investment in clean energy of US$4.8 billion by 2030.
Albert Cheung, deputy CEO of BNEF, said:
“Our report shows how quickly the clean energy opportunity is growing and yet how far away we still are. Spending on investment in the energy transition grew by 17% last year, but needs to grow by more than 170% if we want to move towards net zero in the coming years. Only determined action on the part of political decision-makers can unlock this type of radical change.”
Click here to access the report.
