The Paris-based International Energy Agency (IEA) found that concerns over energy security due to the war in Ukraine played a role in boosting investment in clean energy, the UK Guardian reported.
According to an IEA report, clean energy investment is on track to hit $1.7 trillion in 2023 as investors are turning to low-carbon technologies like electric vehicles, nuclear power grids, and other renewables.
Meanwhile, investments in fossil fuels like oil, gas, and coal are expected to be just over $1 trillion this year, the IEA said.
According to the IEA, there are many factors leading to this increase in clean energy investments, including volatile fossil fuel prices, periods of economic growth, and heighted concern over energy security due to the war in Ukraine.
IEA executive director Fatih Birol said in 2018 global energy investment in all sources was $2 trillion, with $1 trillion being invested in fossil fuels and $1 trillion invested in clean energy. Five years later, fossil fuel investment remains steady while clean energy investment has climbed to $1.7 trillion.
Driving the boom in clean energy investment is solar power. According to Birol, the amount invested in solar energy in 2023 is higher than the investment in oil production for the first time. While conceding that this is only symbolic, he said the change could indictate that the tide is turning.
According to the IEA report, clean energy investment has increased beyond fossil fuel investment in part because governments are becoming concerned about finding secure domestic sources of energy.
At the same time, the war in Ukraine has also increased investment in gas and oil, which is expected to rise 7 percent this year, returning to 2019 levels. Likewise, global demand for coal reached an all-time high last year, particularly due to increased gas prices. Coal investment has increased to nearly 6 times the amount that is called for in 2030 global climate targets.