A report by BloombergNEF (BNEF), a global strategic research service provider, has shown that Investments in low-carbon energy technologies have reached $1.1 trillion globally for the first time, bringing them on par with investments in fossil fuels.
According to the report, Investment in the energy transition also increased 31 per cent from $849 billion in 2021 to $1.03 trillion in 2022, defying supply chain problems and macroeconomic headwinds.
This figure arrived at independently for the purpose of comparison, is estimated at $1.1 trillion in 2022 – the same figure as the energy transition investment total. It marks the first time that global energy transition investment has matched fossil fuel investment, and comes despite fossil investment growth triggered by last year’s energy crisis.
“It is a new record and a huge acceleration from the year before – as the energy crisis and policy action drove faster deployment of clean energy technologies,” according to a BNEF statement.
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Energy Transition Investment Trends is BNEF’s annual accounting of how much funding businesses, financial institutions, governments and end-users are committing to the low-carbon energy transition.
“Almost every sector covered in the report achieved a new record level of investment in 2022, including renewable energy, energy storage, electrified transport, electrified heat, carbon capture and storage (CCS), hydrogen and sustainable materials. Only nuclear power investment did not set a record, staying broadly flat,” the statement said.
“Renewable energy, which includes wind, solar, biofuels and other renewables, remained the largest sector in investment terms, achieving a new record of $495 billion committed in 2022, up 17 per cent from the year prior,” the statement added.
However, electrified transport, which includes spending on electric vehicles and associated infrastructure, came close to overtaking renewables, with $466 billion spent in 2022 – an impressive 54 per cent increase year-on-year.
The statement also said that Hydrogen is the sector that received the least financial commitment at just $1.1 billion in 2022 (0.1 per cent of the total), despite strong interest from the private sector and growing policy support. Hydrogen is, however, the fastest-growing sector with investment more than tripling over the year before.
BNEF’s data further showed that China was by far the leading country for attracting energy transition investment, accounting for $546 billion or nearly half of the global total.
Story was adapted from Business Day.
