Global Energy Investment to Hit Record $3.3 Trillion in 2025, Clean Tech Dominates
ICARO Media Group
**Title: Global Energy Investment to Hit Record $3.3 Trillion in 2025, Clean Tech Dominates**
Global energy investment is projected to reach an unprecedented $3.3 trillion in 2025, according to the latest International Energy Agency's (IEA) World Energy Investment report. Despite navigating economic uncertainties and geopolitical risks, the bulk of this investment—approximately $2.2 trillion—will be funneled into clean technologies such as renewables, nuclear power, grids, battery storage, low-emissions fuels, efficiency enhancements, and electrification. This amount is double what is projected for fossil fuel investments.
IEA executive director Fatih Birol highlighted that nations are striving to insulate themselves from future energy sector shocks. "With the geopolitical and economic uncertainties clouding the energy outlook, energy security is emerging as a primary driver of increased global investment," Birol remarked.
China stands out as the world's top energy investor, with spending almost equaling that of the US and EU combined. While China only slightly edged out the US in 2015, it has since surged ahead, particularly in clean energy. Over the past decade, China's share of global clean energy investment has risen from 25% to nearly 33%, driven by substantial spending on solar, wind, hydro, nuclear, electric vehicles, and batteries.
Solar power continues to dominate the energy landscape, with investment in both rooftop and utility-scale solar expected to reach $450 billion this year, outpacing all other energy technologies globally. Battery storage is also experiencing rapid growth, with investments projected to hit $65 billion by 2025. The nuclear sector is on an upward trajectory as well, with capital flows increasing by 50% over the past five years to approximately $75 billion.
The global energy mix is undergoing significant changes. In 2015, investments in fossil fuels surpassed those in electricity by 30%. However, this year, investments in electricity—which encompass generation, grids, and storage—are anticipated to be 50% higher than spending on oil, gas, and coal.
However, not all investment trends are positive. Annual grid investments, currently at $400 billion, are lagging behind the pace of new generation and electrification projects, posing a threat to electricity security. The IEA warns that grid spending needs to accelerate, but challenges such as permitting delays and supply chain constraints for essential components like cables and transformers are impeding progress.
In another concerning trend, China and India continue to invest in coal, with China initiating construction of nearly 100 gigawatts of new coal-fired power plants in 2024, pushing global coal project approvals to their highest levels since 2015.
Meanwhile, oil investment is set to decline by 6% this year—the first decrease since the COVID-19 pandemic in 2020. This decline is primarily due to reduced spending on US tight oil, which is derived from fracking. Conversely, investment in liquefied natural gas (LNG) is booming, particularly in the US, Qatar, and Canada, with LNG capacity expected to experience its largest-ever growth between 2026 and 2028.
One of the report's most troubling insights is that Africa is being left behind. Despite accounting for 20% of the world's population, the continent attracts just 2% of global clean energy investment. Additionally, overall energy investment in Africa has declined by a third over the past decade. The IEA emphasizes that public finance must scale up rapidly to unlock private capital and bridge the investment gap in developing economies.
In summary, while clean energy investments are soaring, with solar power leading the charge and China taking a dominant position, there are significant concerns. Grid infrastructure upgrades need to keep pace with new generation and electrification projects, and the investment disparity in the Global South needs urgent attention to ensure global energy access and climate goals are met.