World Energy Investment Report 2023: Clean energy funds rise, but mostly in China, Europe, U.S.

Source: The post is based on the article “Clean energy funds rise, but mostly in China, Europe, U.S.” published in The Hindu on 31st May 2023

What is the News?

The International Energy Agency has released the World Energy Investment Report 2023.

What are the key findings of the World Energy Investment Report 2023?

Investment in clean energy has increased in recent years: Investments in clean energy have surpassed investments in fossil fuels by 70% with the transition mainly fuelled by Electric Vehicles (EVs) and renewable power

– For every dollar spent on fossil fuels, $1.7 is now allocated to clean energy, a significant increase from the 1:1 ratio observed five years ago.

– The report also highlights the influence of recent geopolitical events on the energy market. Specifically, it points out that Russia’s invasion of Ukraine has led to substantial instability in the fossil fuel markets. This volatility has inadvertently accelerated the deployment of various renewable energy technologies, despite triggering an immediate scramble for oil and gas resources.

Clean energy investments concentrated in advanced economies: Over 90% of the surge in clean energy investment since 2021 has been concentrated in advanced economies and China. 

The increases in clean energy investment in these regions since 2021 have outstripped the total clean energy investment in the rest of the world combined.

However, there are other regions that are also demonstrating significant progress. India, for instance, continues to exhibit robust investment in solar energy.

Challenges in transitioning towards clean energy: There are many hurdles for many countries in transitioning towards clean energy such as Higher interest rates, ambiguous policy frameworks, market designs, financially constrained utilities and a high cost of capital are all impeding investment.