The latest edition of the World Energy Investment report from IEA reveals that global energy investment is projected to reach an all-time high of $3.3 trillion in 2025. The surge is largely propelled by a massive wave of spending on clean energy technologies, which are set to attract $2.2 trillion — two-thirds of total investment.
This record clean energy outlay spans renewables, nuclear, grids, storage, low-emissions fuels, efficiency, and electrification. The momentum reflects not only climate goals, but also industrial policies, energy security imperatives, and the growing cost advantages of electricity-based systems, the report indicated.
In contrast, fossil fuel investments — covering oil, natural gas, and coal — will total $1.1 trillion, as traditional energy sectors face slower growth and declining demand signals. For the first time since 2020, upstream oil investment is expected to fall by 6 percent year-on-year, primarily due to reduced activity in the U.S. shale sector. However, investments in new LNG capacity are gaining strength, with major projects in the U.S., Qatar, Canada, and others moving forward.
China remains the dominant force in global energy finance. A decade after surpassing the U.S. in total energy investment, China now spends twice as much as the European Union, and nearly matches the combined investment of the U.S. and EU. Its share of global clean energy spending has climbed from 25 percent in 2015 to nearly 33 percent, with broad deployment across solar, wind, hydro, nuclear, battery storage, and electric vehicles.
Over the past five years, global investment in low-emissions power generation has nearly doubled, with solar photovoltaic (PV) as the leading technology. Battery storage is another fast-rising sector, expected to surpass $65 billion this year. Nuclear power investment is also gaining traction, growing by 50 percent since 2020 to reach $75 billion by 2025.
A striking shift is unfolding: the world is entering a new “Age of Electricity.” While fossil fuel investment outpaced electricity-related spending a decade ago, the trend has reversed. In 2025, capital flowing into electricity infrastructure — generation, grids, and storage — will be 50 percent higher than total fossil fuel investments.
Still, some challenges persist. Electricity grid investment, at around $400 billion per year, is failing to keep pace with soaring generation and electrification needs, potentially threatening power system reliability. Meanwhile, in regions like China and India, strong demand is keeping coal investments alive. China alone started construction on nearly 100 GW of coal-fired capacity, pushing global approvals of new coal plants to their highest since 2015.
Energy investment also remains deeply unequal. Developing economies, particularly in Africa, continue to lag. Despite hosting 20 percent of the world’s population and rapidly rising energy needs, Africa captures just 2 percent of global clean energy investment — highlighting a persistent financing gap in vulnerable regions.
As the report marks its 10th edition, it underscores that while global capital is flowing more strongly toward cleaner and more secure energy systems, geopolitical divides, investment inequality, and grid bottlenecks remain critical barriers to a sustainable and inclusive energy future.
Baburajan Kizhakedath