Global energy investment to hit record $3.3trn in 2025
Orisemeke Benjamin
Global energy investment is set to increase in 2025 to a record $3.3 trillion despite headwinds from elevated geopolitical tensions and economic uncertainty, a new International Energy Agency report says.
According to IEA’s annual World Energy Investment, clean energy technologies are set to attract twice as much capital as fossil fuels.
Investment in clean technologies – renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification – is on course to hit a record $2.2 trillion this year, reflecting not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions.
Investment in oil, natural gas and coal is set to reach $1.1 trillion, the energy agency said.
“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 fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas we have yet to see significant implications for existing projects. Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union – and almost as much as the EU and United States combined.” said IEA Executive Director Fatih Birol.
Over the past decade, China’s share of global clean energy spending has risen from a quarter to almost a third, underpinned by strategic investments in a wide range of technologies, including solar, wind, hydropower, nuclear, batteries and EVs. At the same time, global spending on upstream oil and gas is gravitating towards the Middle East.
The report notes that globally, spending on low-emissions power generation has almost doubled over the past five years, led by solar PV. Investment in solar, both utility-scale and rooftop, is expected to reach $450 billion in 2025, making it the single largest item in the global energy investment inventory. Battery storage investments are also climbing rapidly, surging above $65 billion this year.
