The latest report from the International Energy Agency (IEA) has revealed the clean energy investment in top countries or regions.
United States
The United States has made an investment of $280 billion in 2023 in clean energy from $200 billion in 2020. The country also invests a significant amount in oil and gas: for every USD 1.4 spent on clean energy in 2023, US investors directed 1 USD to fossil fuels. (That is slightly below the global average of USD 1.8.)
By the end of 2023, the Infrastructure Investment and Jobs Act allocated nearly $75 billion to clean energy, including projects related to grid improvement and expansion ($21.3 billion), clean energy demonstrations ($21.5 billion), energy efficiency ($6.5 billion) and clean energy manufacturing and workforce development ($8.6 billion).
Clean energy investors have faced some headwinds, including high financing costs due to higher benchmark interest rates (that reached over 5.0 percent since the summer of 2023). Permitting issues and the finalisation of tax credit guidance under the IRA have also meant delays in some cases.
Latin America
In Latin America and the Caribbean (LAC), a diverse region of more than 30 countries, fossil fuels represent two-thirds of the energy mix, well below the world average of 80 percent. The use of coal is quite low, but oil use – mainly for transport but also for industry – is relatively high, despite a share of biofuels in road transport that is twice the global average.
The use of renewable energy has been central to LAC, where renewables represent a 60 percent share of the power mix (double the world average). LAC has a legacy of strong use of hydropower for electricity production, with many large dams built long ago. While its growth prospects are limited, hydro remains important for flexibility.
There has been strong momentum for clean investments in parts of the region, and spending in fossil fuels has also risen in recent years. LAC’s overall ratio of clean energy to fossil fuels investment just under half the 2023 global average. Energy investment is set to reach USD 185 billion in 2024, a record high. The power sector accounts for over 35 percent, while fossil fuels supply represents almost 55 percent and end-use less than 10 percent.
Europe
European Union has the highest clean energy to fossil fuels investment ratios: it spends more than USD 10 on clean energy for every USD 1 invested in fossil fuels. In 2023, investment in renewables generation totalled almost USD 110 billion, an increase of more than 6 percent from the previous year.
Though the cost of capital for renewables has seen a slight rise due to supply chain and inflation pressures, renewable investments remain very cost-competitive. Denmark and Germany remain at the forefront of the wind power sector in Europe, despite ongoing profitability challenges.
Spain has led the surge in solar adoption and has seen wholesale electricity prices fall to record lows during periods of high solar output – bringing some benefits for consumers but also a warning sign for some investor revenue streams and the prospects for future investment.
Investment in power grids rose by more than 20 percent in 2023, nearly reaching USD 65 billion, a very positive development that reflects the need for more grid interconnection, especially to facilitate power flows to central European markets. Meanwhile, there was also ongoing growth in oil and gas investments, which reached over USD 30 billion in 2023.
Investment in liquified natural gas (LNG) reached nearly 7 billion, while Europe added more than 50 bcm/year of extra LNG import capacity to switch away from Russian gas, mainly via Floating Storage Regasification Units (FSRUs).
Africa
Achieving Africa’s energy- and climate-related goals by 2030 will require annual investments of over USD 200 billion through the end of this decade. Africa will be investing around USD 110 billion in energy in 2024, of which nearly USD 70 billion to fossil fuel supply and power, with the remainder going to a range of clean energy technologies.
Energy investments are equivalent to 1.2 percent of the region’s GDP and clean energy investments, while rising, account for just 2 percent of the global total.
Middle East
In Middle East, the home to five of the world’s top oil producers: Saudi Arabia, Iraq, the United Arab Emirates (UAE), Iran, and Kuwait, spending on fossil fuel supply predominates: for every 1 USD invested in fossil fuels, only 20 cents are allocated to clean energy investment, which represents approximately one-tenth of the average global ratio of clean energy to fossil fuel investment.
Energy investment in the Middle East is expected to reach approximately USD 175 billion in 2024, with clean energy accounting for around 15 percent of the total investment. In the APS by 2030, clean energy investment more than triples compared with 2024. As a result, by the end of the decade, every 1 USD invested in fossil fuels in this scenario would be matched by 70 cents going to clean energy.
China
In 2023, China commissioned as much solar PV as the entire world did in 2022 while its wind additions also grew by 66 percent year-on-year. Over the past five years, China also added 11 GW of nuclear power, by far the largest of any country in the world.
The year 2023 saw robust growth for the so-called “new three” (xinsanyang) industries – solar cells, lithium batteries and electric vehicles (EV) – which saw a 30 percent jump in exports in 2023 from a year earlier, making them a major factor in Chinese trade. These trends are expected to continue into 2024, with the largest portion of China’s investments heading towards low-emission power.
India
Indian clean energy investment reached USD 68 billion in 2023, up by nearly 40 percent from the 2016-2020 average. Almost half of this was devoted to low-emissions power generation, which includes solar PV.
Fossil fuel investment grew by 6 percent over the same period to reach USD 33 billion in 2023. Clean energy investment is on track to double by 2030 under today’s policy settings, but would need to rise by a further 20 percent to get fully on track for the country’s energy and climate goals.