(Oil Price) – Energy investments this year are set to hit $3.3 trillion on the back of a strong increase in spending on things such as wind and solar, the International Energy Agency has forecast.
In its latest World Energy Investment report, the agency also said that China will cement its position as the top energy investor globally this year.
The IEA noted that the surge in energy investments will materialize despite significant challenges such as muted economic growth and uncertainty related to geopolitics and trade policies.
What’s more, the IEA believes that spending on non-hydrocarbon energy, including, besides wind and solar, also nuclear, grid upgrades, energy storage, new fuels, and efficiency, will be twice the amount spent on oil and gas this year. At $2.2 trillion, the total for what the IEA calls clean energy certainly seems impressive.
“Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record $3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks,” the IEA’s chief, Fatih Birol said.
While investment in wind, solar, and storage rises, the IEA expects investment in oil and gas to fall by 6% this year. The decline will be driven by lower oil prices, the IEA believes, as well as by weaker demand. Demand for oil this year, according to the IEA, is set to decline for the first time since the pandemic lockdowns of 2020.
In the non-hydrocarbon segment, solar is going to see the biggest chunk of investments, at $450 billion this year, the IEA has predicted. This will also make solar the biggest investment magnet in energy as a whole. In what looks like a closely related trend, investment in storage is set to rise significantly this year, to $65 billion.
By Irina Slav for Oilprice.com
