Shift to clean energy growing

But coal investments still too high, IEA says

JAKARTA, Indonesia – Energy security concerns – worsened by the war in Ukraine – and policy support from rich countries are likely to help investments in clean energy outpace spending on fossil fuels, the International Energy Agency said in a report issued Thursday.

But investments in coal are on course to rise by about 10% in 2023, nearly six times what the IEA has estimated they should be for the world to end its reliance on fossil fuels and achieve emissions cut goals for countering climate change, it said.

“We are in a significantly better place than we were a few years ago,” Tim Gould, IEA’S chief energy economist, said at the report’s launch Thursday. “There’s still a very long way to go, but there are finally some encouraging signs for us all to welcome.”

Some $2.8 trillion is set to be invested in energy globally in 2023, of which more than $1.7 trillion is expected to go to clean technologies including modern electricity grids, energy storage, low-emissions fuels and electric vehicles, according to the organization’s latest World Energy Investment report.

Slightly more than $1 trillion is going to coal, gas and oil – fossil fuels that are a major source of emissions that are contributing to global warming.

Part of the problem is that demand for energy is outstripping increases in supplies in many parts of the world. Powerful energy industry interests also sway decisions about investments in future capacity, often in favor of fossil fuels.

Global coal demand reached an alltime high in 2022 and about 40 gigawatts of new coal power plants were approved, the highest figure since 2016, with almost all in China, the report says.

Still, the trend is shifting in favor of renewable energy. For every $1 spent on fossil fuels, $1.70 is now spent on clean energy.

Five years ago the ratio was 1:1, according to the report.

Clean energy investments have been boosted by a variety of factors in recent years, including periods of strong economic growth and volatile fossil fuel prices that raised concerns about energy security, especially following Russia’s invasion of Ukraine.

Enhanced policy support such as the Inflation Reduction Act in the U.S. and initiatives in Europe, Japan, China and elsewhere have also played a role.

“Solar is the star performer and more than $1 billion per day is expected to go into solar investments in 2023 (USD 380 billion for the year as a whole), edging this spending above that in upstream oil for the first time,” the report said, referring to crude oil output.

Associated Press climate and environmental coverage receives support from several private foundations. The AP is solely responsible for all content.