Unlocking investment in clean energy transitions
International Energy Agency (IEA)
Committed to shaping a secure and sustainable energy future for all.
Plus, who’s financing energy projects around the world; the latest policy review of the US; more energy data, country by country; smart grid innovation trends; and more ...
Clean energy investment in focus at high-level COP29-IEA event in London
Global spending on clean energy is at an all-time high. However, countries around the world –especially many emerging and developing economies – still need sharp increases in investment to reach their energy and climate goals.
Closing this gap was a key topic of the conversations at the recent London Climate Action Week, where our Executive Director Fatih Birol and COP29 President-Designate Mukhtar Babayev chaired the second COP29-IEA High-Level Energy Transition Dialogue. More than 50 energy, finance and climate leaders took part in the dialogue to address how the public and private sectors can better support a rapid increase in clean energy investment globally, which would need to double to more than $4 trillion annually by 2030 on a path to net zero emissions.
Hosted by the Lord Mayor of London at the City of London's historic Mansion House, the event focused on unlocking the financing needed to bring clean energy projects to fruition – especially in emerging and developing economies, where high borrowing costs and real and perceived risks are preventing capital from reaching many projects that need it.
Participants included African Union Commissioner for Infrastructure and Energy Amani Abou-Zeid; Germany’s State Secretary and Special Envoy for International Climate Action Jennifer Morgan; and Ireland’s Minister for Transport, Climate, Environment & Communications Eamon Ryan – as well as Selwin Hart, Special Advisor to the UN Secretary-General on Climate Action and Just Transition; Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All; and COP26 President Alok Sharma. A range of leaders from across the financial sector and industry also took part, including Prudential Chair Shriti Vadera and ReNew Energy Co-founder and Chairperson of Sustainability Vaishali Nigam Sinha.
While in London, Dr Birol also highlighted the investment dynamics shaping the energy landscape – the subject of the recently published 2024 edition of our World Energy Investment report – in his keynote speech at the Net Zero Summit of the Institutional Investors Group on Climate Change. And he delivered the keynote speech at an event hosted by the Powering Past Coal Alliance, where he emphasised that while global coal use is set to peak this decade under today's policy settings, stronger efforts are needed for rapid, secure and fair transitions to clear energy.
Read our news item on our latest High-Level Dialogue with the COP29 Presidency. And learn more about the latest energy investment trends – and how they relate to the world's energy and climate targets – in World Energy Investment 2024.
Who is investing in energy around the world, and who is financing it?
Our recent World Energy Investment report provides first-of-its kind analysis of the sources of investment and finance in the energy sector. These findings were outlined in a recent commentary that looks at key trends over the past decade and explores their implications.
The capital structure of investment in the global energy sector has remained stable since 2015. Currently, debt accounts for around 46% of total spending and equity for 54%. However, some parts of the sector, such as clean electricity, are more likely to rely on debt than others.
Another takeaway is that while corporations account for the greatest share of energy investments, households’ share of it has doubled since 2015 as clean energy transitions have accelerated. This includes recent spending from higher-income households on rooftop solar, energy efficiency improvements, heat pumps and EVs, some of it supported by governments.
Discover more trends – and what they mean for the future of energy – in our commentary.
New policy review highlights US achievements on energy security and transitions
The United States has made significant strides in its efforts to ensure a secure, sustainable and affordable energy system in recent years thanks to government actions that have helped unleash a surge in clean energy investment, according to our latest review of US energy policies.
The United States 2024: Energy Policy Review provides an assessment of US policies and their implications for the country’s energy and climate goals. It finds that the United States’ clean energy economy is expanding as the federal government works to build diverse and resilient energy supply chains with the aim of increasing energy security and establishing the nation as a global leader in clean technology manufacturing. However, meeting the country’s energy and climate goals and anticipating emerging risks will require a focus on robust implementation.
Over the past four years, the United States has seen a nearly 60% surge in clean energy investment – leading to the creation of more than 310 000 jobs in the sector, according to the report. A hub for technological innovation, the United States is now a major market for renewables, batteries and electric vehicles, among other clean energy technologies. At the same time, the country continues to play a vital role in upholding global energy security as the world’s largest oil and gas producer. Oil and gas exports, which are expected to continue to grow in the coming years, have eased pressure on global markets following Russia’s invasion of Ukraine.
The IEA regularly conducts peer reviews of the energy policies of its member countries and provides key recommendations – a process that supports energy policy development and encourages the exchange of international best practices and experiences. Read the news article and the full report.
US and EU lawmakers call for expanded IEA work on methane emissions
Prominent lawmakers from the US Congress and the European Parliament recently wrote to our Executive Director to urge the IEA to expand our pioneering work in the crucial area of tackling methane emissions from fossil fuel operations.
Acknowledging “the critical role” of the IEA “in shaping global energy policy and promoting sustainable energy practices”, the 17 lawmakers – 10 from the US Congress, 7 from the European Parliament – requested in a letter to Dr Birol that “the IEA further build on its abundant methane portfolio and take specific actions to address methane emissions in the oil and gas sector”. These include a range of potential measures to help drive a 75% reduction in methane emissions from fossil fuel operations by 2030, which our analysis has shown is both achievable and necessary to reach international energy and climate goals.
Methane is responsible for around 30% of the rise in global temperatures since the Industrial Revolution, and rapid and sustained reductions in methane emissions are key to limiting near-term global warming and improving air quality. The energy sector – including oil, natural gas, coal and bioenergy – accounts for over a third of methane emissions from human activity.
Find out more and explore the data in the latest update of our Global Methane Tracker.
Our upgraded countries and regions pages make more data and statistics freely available
In another major step towards making more IEA data freely available and accessible, we recently upgraded the Countries and Regions section of our website by adding a comprehensive range of statistics and information at the global, regional and national levels.
The revamped country pages are the latest example of the IEA delivering on recent mandates from our member countries on free and accessible data. Our Agency was established in 1974 to promote energy security and provide authoritative analysis and policy advice for its member countries and beyond. Energy statistics are at the heart of that work, and the new country and region pages are part of the our efforts to provide policy makers and other stakeholders with the most timely and useful data and analysis available, which they can use to inform decision-making.
The Countries and Regions section of the website features 172 regional and country-level pages that provide an up-to-date snapshot of the energy system and recent trends in the energy mix, CO2 emissions, renewables deployment, energy efficiency, and the production, trade and consumption of electricity, oil, biofuels, gas and coal. The sections are designed to interactively guide the reader through energy flows and balances.
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Read more in our news article and explore the Countries and Regions pages themselves.
In other news...
Our Executive Director recently hosted Peruvian Minister of Energy and Mines Rómulo Mucho at our headquarters in Paris. They discussed opportunities for further strengthening cooperation in support of Peru's energy priorities, including on critical minerals and renewables.
In the pursuit of a cleaner energy sector, new technologies play a pivotal role in modernising a consistently overloaded grid. In a new report, A Global Review of Patent Data for Smart Grid Technologies, we analyse trends in smart grid technology innovation – showcasing where, when and in which subsectors innovation is occurring. Dive in here.
Energy efficiency is playing an increasingly important role in Azerbaijan's energy transition and can deliver major benefits for the country's economy and energy security, including by reducing its exposure to volatile fossil fuel prices. Our new report and roadmap on energy efficiency in Azerbaijanlooks at the progress that has been made and offers recommendations to policy makers on potential next steps. Read it here.
Our Director of Energy Markets and Security Keisuke Sadamori delivered the keynote address at the recent Nuclear Regulatory Forum in Warsaw, Poland, which was organised by the Energy Regulators Regional Association, the Ministry of Climate and Environment of Poland, and the Energy Regulatory Office of Poland. In his address to energy regulators from around the world, Mr Sadamori highlighted the role of nuclear in transitions to net zero emissions, as well as the growth that nuclear power is experiencing globally.
We recently organised a workshop in Noida, India, in collaboration with the World Energy Council India. The highly interactive training, which took place at the Power Management Institute, focused on the role and importance of data to strengthen energy policy formulation, planning and implementation. It was attended by roughly 50 professionals from across the public and private sector.
ENERGY SNAPSHOT
The global transition towards an energy system with net zero emissions would result in lower energy costs than if the world continues on its current path. Our recent special report, Strategies for Affordable and Fair Clean Energy Transitions, shows that scaling up clean energy technologies is key to improving affordability and energy security, as well as international efforts to lower emissions. Read the report.
WHAT WE'RE READING & WATCHING:
COMING UP:
11 July: Oil Market Report
16 July: Gas Market Report – Q3 2024
24 July: Coal Market Report – Mid-Year Update
October: World Energy Outlook 2024
November: Energy Technology Perspectives 2024
5 December: Global Conference on Energy and AI
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2wThe insights from the International Energy Agency (IEA) post on unlocking investment in clean energy transitions are truly enlightening. As global spending on clean energy reaches new heights, it's crucial to address the investment gaps, especially in emerging economies. In South Korea, we're witnessing a similar commitment to clean energy, though economic uncertainties pose significant challenges. The emphasis on making data freely available and accessible is vital for informed decision-making. The country's approach to bolstering public awareness and integrating advanced technologies into our energy strategies is commendable. However, like many other nations, we must navigate the complexities of financing and implementing these initiatives effectively. The global call for robust public-private partnerships, as seen in the IEA's discussions, is essential for accelerating clean energy projects. By leveraging such partnerships and focusing on innovative solutions, we can overcome the barriers to investment and drive substantial progress towards a sustainable future.
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Itera Group COO
2wA shift to new energy sources, a more optimised distribution, continuously implementing new technologies to increase energy efficiency and energy savings and management of emissions (including collection and storage) must be a business case, including predictable incentives to support the shift. If not a business base the shift will not be a sustainable financial approach.