Renewables are taking a large part of global investment in clean energy and energy efficiency since 2017, as the IEA graph here shows, but the agency believes to meet climate objectives, this would need to double in the 2020s to maintain global temperatures well below a 2°C rise and more than triple to ‘keep the door open for a 1.5°C stabilization’. (Source: IEA)
- IEA’s report on global energy investments sees $1.9 trillion being spent in 2021
- 70% of $530 billion to be invested on all new generation capacity will be claimed by renewables, led by solar PV
- Investments in PV are especially like to grow by over 10% in China, India, the US and Europe
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As the world gradually recovers from the impact of COVID-19 related challenges, a new report from the International Energy Agency (IEA) sees 2021 global investment in energy to rebound by close to 10% in 2021 on annual basis to a total of $1.9 trillion, as global energy demand increases by 4.6% this year.
Of this, according to the IEA report titled World Energy Investment 2021, global power investment will claim over $820 billion, representing annual growth of around 5%, to be spent on new generation capacity, grid and storage. Renewables led by solar are likely to claim 70% of the $530 billion expected to be spent on all new generation capacity.
According to the authors of the report, solar PV will score over wind energy in 2021 due to its competitiveness and existing pipeline of projects committed in tenders, auctions and corporate power purchase agreements (PPA). Investments in PV are forecast to grow by more than 10% in China, India, the US and Europe. This growth will come from commissioning of utility scale solar projects as well as in distributed PV generation facilitated by improving economic and public health conditions.
“Thanks to rapid technology improvements and costs reductions, a dollar spent on wind and solar photovoltaic (PV) deployment today results in four times more electricity than a dollar spent on the same technologies ten years ago,” reads the report. At the same time, the report notes a ‘sharp drop’ in approvals for new coal-fired power plants.
While there is likely to be $750 billion investment on clean energy technologies and efficiency in 2021, the IEA believes this would need to double in the 2020s to maintain global temperatures well below a 2°C rise and more than triple to ‘keep the door open for a 1.5°C stabilization’.
“Clear policy signals from governments would reduce the uncertainties associated with clean energy investments and provide investors with the long-term visibility they need,” explained IEA Executive Director Fatih Birol. “Our Roadmap shows there are huge opportunities for companies, investors, workers and entire economies on the path to net zero. Governments have the power to unlock these broad-based benefits.”
The IEA report can be downloaded for free on the agency’s website.
In its May 2021 released report Net Zero by 2050: A Roadmap for the Global Energy Sector Report, the IEA recommended global solar PV capacity additions to 630 GW annually by 2030 as one of the ways for the world to reach net zero energy sector (see IEA Wants 630 GW Annual Solar PV Additions From 2030).