The energy crisis and policy action by government has meant investment in the transition to low-carbon energy exceeded $1.1tn in 2022, according to a new report.
The Energy Transition Investment Trends study, from research firm BloombergNEF, discovered that investment in low-carbon technologies had reached parity with fossil fuel supply.
Almost every sector saw record growth last year, including electrified transport. Spending on electric vehicles and associated infrastructure, came close to overtaking renewables as the biggest investment sector, with $466bn spent in 2022 – a 54% increase year-on-year.
Renewable energy, including wind, solar, biofuels and other renewables, remained the largest sector due to a new record of $495 billion committed in 2022 – up 17% from 2021.
Hydrogen received $1.1 billion in 2022 – 0.1% of the total), despite strong interest from the private sector and growing policy support. But it is the fastest-growing sector with investment more than tripling over the year before.
Nationally
The data showed China led investment with $546bn or nearly half of the global total. The US was second with $141bn and the EU as a bloc was $180 billion. Germany retained its third place, while the UK dropped one place to fifth as France climbed to fourth.
It also showed that low-carbon investment matched fossil fuels for the first time – despite the energy crisis.
Albert Cheung, Head of Global Analysis at BloombergNEF, said: “Our findings put to bed any debate about how the energy crisis will impact clean energy deployment.
“Rather than slowing down, energy transition investment has surged to a new record as countries and businesses continue to execute on transition plans. Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won’t look back. These investments will drive short-term job creation and help to address medium-term energy security objectives. But much more investment is needed to get on track for net zero in the long term.”
Future
The report also estimated that investment must triple immediately to meet net-zero by 2050 – with $4.55tn a year needed by the end of the decade to hit the study’s own net-zero scenario.
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