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Report: Solar Power Could Overtake Oil Production Investment Helping to ‘Fuel’ EVs

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According to a recent report by the International Energy Agency (IEA), investment in clean energy is expected to surpass spending on fossil fuels in 2023, with solar projects leading the way and overtaking oil production for the first time. The IEA’s World Energy Investment report reveals that annual investment in renewable energy has increased by nearly a quarter since 2021, compared to a 15% rise for fossil fuels.

The report highlights that approximately 90% of clean energy spending comes from advanced economies and China, indicating a global divide between wealthy and poorer nations. Fossil fuel investment still remains double the levels required to achieve net-zero emissions by the middle of the century.

Fatih Birol, the Executive Director of the IEA, emphasized the rapid progress of clean energy, stating, “Clean energy is moving fast – faster than many people realize.” He noted that for every dollar invested in fossil fuels, about 1.7 dollars are now being allocated to clean energy, a significant shift from the one-to-one ratio observed five years ago.

The report forecasts that approximately $2.8 trillion will be invested in energy globally in 2023, with over $1.7 trillion directed towards renewables, nuclear power, electric vehicles, and efficiency improvements. The remaining $1 trillion is expected to be allocated to oil, gas, and coal. However, the demand for coal will reach a record high, six times the level required in 2030 to achieve net zero by 2050.

Solar power spending is projected to surpass $1 billion per day in 2023, totaling $382 billion for the year, while investment in oil production will amount to $371 billion. This development is hailed as solar power becoming a true energy superpower and a crucial tool for rapid decarbonization of the global economy, according to Dave Jones, the head of data insights at energy think tank Ember.

Interestingly, some of the sunniest regions in the world have the lowest levels of solar investment, revealing an untapped potential for further growth in solar energy deployment. Despite the positive advancements in clean energy, the IEA highlights that investment in new fossil fuel supply is expected to rise by 6% in 2023, reaching $950 billion.

While the IEA did not explicitly reiterate its previous recommendation to halt investment in new oil, gas, and coal supply projects to achieve net-zero emissions by the middle of the century, such calls have been criticized by producer group OPEC, which argues that they undermine global energy security and growth. Scientists and international climate activists have consistently warned about the detrimental impact of the fossil fuel industry on exacerbating climate change’s catastrophic consequences.

Source: Reuters

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