- Rystad Energy says in 2022 global energy spending is likely to go up to $2.1 trillion, due to oil and gas along with rising prices
- Of this, the largest spending is expected in upstream oil with $658 billion growing by 16% YoY which wouldn’t have been the case had it not been for the Russian invasion of Ukraine
- Solar energy capacity is likely to add up to 140 GW AC in 2022 with spending increasing 64% to $191.47 billion
- Total green energy spending this year should see an annual increase of 24% or $125 billion
Rising prices of electricity, oil and gas as well as high prices of raw materials, labor and logistics solutions are likely to push up global energy spending in 2022 to $2.1 trillion, out of which green energy spending alone would grow by 24% or $125 billion on annual basis, according to analysts with Rystad Energy.
Oslo, Norway based consultancy counts global solar and wind energy capacity addition in 2022 to grow to around 140 GW AC and 110 GW AC, respectively basis current pipeline of projects. For renewables, project costs have already gone up between 10% to 35%, compared to 2020 levels, thanks to high prices and tight supply of critical elements lithium, nickel, copper and polysilicon.
For solar specifically, annual spending in 2022 is likely to go up 64% to a total of $191.47 billion, and a 24% increase for onshore wind to $209.06 billion, while for offshore wind it would be a decline of 15% to $43.79 billion.
That the Russian invasion of Ukraine will speed up energy transition towards cleaner sources of electricity is now kind of a given as the European Union (EU) works to reduce its reliance on Russian fuel, however upstream oil and gas spending is likely to grow 16% or $142 billion in 2022 to $658 billion and 15% to $401 billion, respectively—the highest among all energy sources—compared to 2021 as oil and gas producers increase budgets to enhance output to meet demand.
“The world is now spending more on energy than ever before. The year 2014 was the last time we saw similar numbers,” said Head of Energy Service Research at Rystad Energy, Audun Martinsen. “One can see a major shift in the amount of spending on green energy, which has increased, with a drop in expenditure on oil and gas. However, expenditure on other fossil fuels, such as coal, has remained constant.”
While the EU has trained its lens on green energy led by solar and wind under its REPowerEU strategy, SolarPower Europe believes the bloc has potential to aim for 1 TW solar by 2030 (see ‘1 TW Of EU Solar Capacity By 2030’).