Global Investments in Clean Energy Technology has Increased 17%

Overview:

Global investment in the low-carbon energy transition have hit a record $1.77 trillion in 2023. This is up 17%, according to BloombergNEF's Energy Transition Investment Trends 2024 report. China led in investment with $676 billion, but the EU, US, and UK collectively exceeded China with $718 billion. The report emphasizes the need for an annual average of $4.8 trillion in investment from 2024 to 2030 to achieve net-zero goals. Clean energy supply chain investment reached $135 billion in 2023, projected to rise to $259 billion by 2025.

Summary:

Global investment in the low-carbon energy transition reached a record $1.77 trillion in 2023, marking a 17% increase, according to BloombergNEF's Energy Transition Investment Trends 2024 report. Electrified transport emerged as the largest sector, growing 36% to $634 billion, surpassing renewable energy spending at $623 billion. Despite challenges such as geopolitical turbulence and high-interest rates, the clean energy transition demonstrated resilience. The report highlights strong growth in emerging areas like hydrogen, carbon capture, and energy storage, with investments tripling, nearly doubling, and rising 76%, respectively.

China led in total investment with $676 billion (38% of the global total), but the EU, US, and UK collectively outpaced China with $718 billion, a shift from 2022. The US, in particular, experienced a 22% YoY investment increase to $303 billion. However, the report emphasizes that the current investment levels are insufficient to achieve net-zero goals by mid-century. To align with BNEF's Net Zero Scenario, annual energy transition investment needs to average $4.8 trillion from 2024 to 2030, nearly three times the 2023 total. Albert Cheung, Deputy CEO of BNEF, underscores the need for a more than 170% growth in investment, requiring determined action from policymakers.

The report also sheds light on clean energy supply chain investment, hitting $135 billion in 2023 and projected to rise to $259 billion by 2025. While this surge benefits the energy transition by reducing equipment prices, it may lead to squeezed margins for solar and battery manufacturers due to oversupply. Additionally, the report tracks climate-tech equity raising ($84 billion) and energy transition debt issuance ($824 billion). Equity raising has declined in the past two years, while debt issuance rose by 4% in 2023, reflective of stabilizing or falling interest rates. Utilities led in debt issuance, followed by financial institutions, while oil and gas companies' energy transition debt issuance decreased.

Sources: https://about.bnef.com/blog/global-clean-energy-investment-jumps-17-hits-1-8-trillion-in-2023-according-to-bloombergnef-report/