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Solar Power Overtakes Oil Spending for First Time with Global Investment of $1 Billion Per Day

published: 2023-05-26 15:59

According to the International Energy Agency (IEA), the global investment in solar power is set to exceed that in oil production, demonstrating the scale and speed of energy transformation.

As the institution’s latest report reveals, clean energy investments worldwide have soared and surpassed fossil fuel spending. Global energy investments are estimated to hit $2.8 trillion in 2023, with more than $1.7 trillion spent on technologies for EVs, renewable energy, nuclear, energy storage, and other clean energy use.

By comparison, investments in fossil fuel supply and electric power total around $1 trillion. Additionally, clean energy investments now accounts for 24% of total spending, greater than the 15% share of fossil fuel expenditure. IEA Executive Director Fatih Birol indicated that the gap between clean energy and fossil fuel investments is growing wider and wider.

According to the IEA, if $1 is spent on fossil fuels, $1.7 is allocated to clean energy, compared to a 1:1 ratio five years ago.

The IEA report also shows a significant increase in solar energy investments and a decline in oil production expenditure over the past decade. Driven by technological advances in solar energy and EVs, clean energy investments have seen a substantial rise, gradually replacing the demand for oil, coal, and natural gas. It is projected that in 2023, over $1 billion will be spent on the solar energy sector every day, totaling $380 billion for the entire year, surpassing upstream oil investments for the first time.

▲The light blue bars indicate global oil investments, while the dark blue ones represent solar energy spending. In 2023, oil production and solar power investments will amount to $371 billion and $382 billion, respectively. (Source: IEA)

However, even with clean energy investments surpassing fossil fuels for the first time, it is insufficient to curb global warming. The amount invested in fossil fuels remains high, nearing the pre-pandemic peak. As IEA predicts, a rapid decline in fossil fuel investments is necessary to achieve net-zero emissions by 2050. The report indicates that clean technology investments need to double by 2030 to have a chance of keeping global warming under 1.5°C.

Once again, the IEA points out in the report that the world has seen a 10% increase in coal supply investments this year, reaching a historic high. The majority of these investments are taking place in China, where the government is constructing new coal-fired power plants to address electricity shortages.

 (Photo credit: Unsplash)

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