Global investments in solar energy in 2023 will for the first time exceed the amounts invested in oil extraction, as reported Thursday by the International Energy Agency, which nevertheless expects a “revival” in financing allocated to fossil fuels.
Due to the energy and climate crises, investment in low-carbon technologies is expected to reach $1.7 trillion in 2023, while investment in oil, gas and coal will reach about $1 trillion, according to the International Energy Agency’s annual report on energy investments.
These funds related to renewable energy sources (wind and solar energy), nuclear energy, electric cars and heat pumps are expected to grow by 24% annually during the period 2021-2023.
At the same time, the amounts allocated to hydrocarbons and coal continue to rise by 15% annually.
“Clean energy is advancing rapidly, faster than many people imagine,” said IEA Director Fatih Birol. “For every dollar invested in fossil fuels, about $1.7 is invested in clean energy. Five years ago, that was 1-1.”
In its annual report on investments in the field of energy, the agency said that about $380 billion, or more than $1 billion per day, will go this year to solar energy, mainly to photovoltaic cells, while investments worth $370 billion will be allocated to oil production (exploration and extraction).
In another example, global investment in electricity production is now dominated by 90% of low-carbon technologies.
The volatility of fossil fuel prices, driven by the war in Ukraine, and the support measures taken by the European Union, China, Japan and the United States, have contributed to this trend.
Nevertheless, the International Energy Agency issued many warnings, above all, of the absolute dominance of China and developed economies in this regard.
Despite some hope in a number of places (solar energy in India, Brazil and the Middle East), investments in other regions are still low, as warned by the agency of the Organization for Economic Co-operation and Development, which is calling on the international community to mobilize on this issue.
“Solar is a true energy superpower and the primary vehicle we have for rapid decarbonization of the economy,” said Dave Jones of the Amber Center for Energy Research.
But “the irony is that some of the sunniest places in the world have the lowest levels of solar investment, and it’s a problem that needs to be addressed.”
Also, the International Energy Agency indicated that spending on oil and gas exploration and exploitation is expected to grow by 7 percent in 2023, which represents a return to 2019 levels that move the world off the path towards carbon neutrality in the middle of the century.
In 2021, the agency stressed the need to immediately abandon any new project to exploit fossil fuels in order to achieve the goal of carbon neutrality.
Carbon neutrality, which involves not emitting more greenhouse gases than can be absorbed, aims to keep global warming below 1.5°C in order to avoid major, irreversible impacts.
However, coal demand reached a historic peak in 2022 and investment in this sector in 2023 is expected to be six times higher than what the International Energy Agency recommends for 2030 to achieve carbon neutrality.