IEA says recovery in clean energy spending is not enough: Energy spending is expected to recover to near pre-pandemic stages this year, however the International Energy Agency (IEA) advises this is nowhere close enough to put the world on course for net zero by 2050.
The group has made aware the gap between current investment trends & the needed spending on climate relief is “a critical fault line in the clean energy transition“, emphasising that considerably more investment has to be directed into the clean energy sector, specifically in emerging markets & developing countries.
The IEA forecasts a 10% rebound will see the entire energy spending throughout the globe hit $1.9 trillion (£1.34tn) in 2021, with clean energy investments expanding by about 7% throughout the same period to a peak of $750 billion (£530bn).
Even though this sounds positive, the IEA reports this level of financial dedication falls “far below” the expenditure required to coordinate the world’s energy systems to an honestly clean future.
It says clean energy spending will have to treble in the 2020s to get on target to carry out net zero by 2050 & permit temperature increases to be restricted to 1.5°C.
Fatih Birol, Executive Director of the IEA, stated: “The rebound in energy investment is a welcome sign, and I’m encouraged to see more of it flowing towards renewables, but much greater resources have to be mobilised and directed to clean energy technologies to put the world on track to reach net-zero emissions by 2050.
“Based on our new Net Zero Roadmap, clean energy investment will need to triple by 2030.”
The report emphasises that renewables are expected to consist of 70% of investment in new power production capacity this year, with energy spending trends progressing to change towards electricity markets.
The IEA says 2021 is liable to be the 6th year in a row in which spending on the power sector is greater than that in traditional oil & gas supply, and acknowledges however upstream oil and gas investment is expected to grow by a tenth, spending will stay “well below” pre-crisis levels.
It implys the proportion of capital spending funneled into clean energy by the oil & gas industry could increase to 4% this year, up from 1% in 2020. Nevertheless, this figure however needs to rise by a significant margin to attain sustainability goals.
Dr Birol remarked: “As set out in detail in our recent Roadmap to Net Zero by 2050, governments need to go beyond making pledges to cut emissions and take concrete steps to accelerate investments in market-ready clean energy solutions and promote innovation in early-stage technologies.
“Clear policy signals from governments would reduce the uncertainties associated with clean energy investments and provide investors with the long-term visibility they need. Our Roadmap shows there are huge opportunities for companies, investors, workers and entire economies on the path to net zero. Governments have the power to unlock these broad-based benefits.”
IEA says recovery in clean energy spending is not enough