The world is immersed in a necessary energy transition, where it is expected to drastically reduce the use of Fossil fuels such as oil, natural gas and coal to make way for the renewable energyThese fossil fuels are responsible for emitting large amounts of greenhouse gases, which are accelerating climate change globally.
Today, it is recorded a massive investment in the electricity sector, rather than fossil fuels. It is a positive sign that we are moving towards a more sustainable economy, and for the first time in history, more has been invested in electricity than in energy sources based on fossil fuels.
Investments in the electricity sector
A recent report from the International Energy Agency (IEA) indicates that in 2016 alone, global investments in electricity amounted to 1,7 trillions of dollars (equivalent to 1,5 trillion euros). To give an idea of the magnitude, this figure is equivalent to 2,2% of world GDPWhile this is good news on the path towards a cleaner energy transition, these investments have been accompanied by some challenges.
Specifically, investment in electricity experienced a 12% drop compared to the previous year, marking a consecutive decline in investment levels. However, despite this reduction, the electricity sector surpassed investment in fossil fuels for the first time. Of these resources, a 43% of investments in electricity supply corresponded to clean energy.
How are investments distributed?
Global electricity investments remained stable around 630.000 millones de euros, with spending on grids increasing but coal-fired generation declining. Reports suggest that although investment in clean energy has declined in recent years, this trend is expected to start stabilising.
One of the leading countries in investment is China, which in 2016 held the title of the world's largest investor in energy terms. On the other hand, United States It also remained an investment power, with a 16% of total global investments, despite a decline in oil and gas spending.
Investments in renewable energy have been key to making solar and wind energy competitive with fossil fuels. According to the IEA, Photovoltaic Solar Energy It accounts for a large part of the investments in renewables, with a record expenditure of 500.000 million by 2024, projected to surpass the sum of all other electricity technologies.
The rise of renewable energy
The growth of renewable energy has been driven primarily by the falling cost of clean technologiesFor example, the cost of the photovoltaic modules has fallen by 30% in the last two years. This has partially offset inflationary pressures and higher financing costs, which are currently affecting renewable projects.
Despite the difficulties, the Power Plants and heat pumps are experiencing steady growth, which has accelerated investment in these sectors. International Energy Agency (IEA) states that for every dollar invested in fossil fuels, Two dollars will be dedicated to clean energy, which demonstrates a significant paradigm shift.
As for storage technologies, it is estimated that investments in networks They will grow until they reach 400.000 million by 2024, doubling in important markets such as Latin America, driven by countries such as Colombia and Brazil.
Investments in emerging countries
The IEA report also highlights that, although advanced economies and China lead investments in clean energy, accounting for up to 90% of total, emerging economies like India and Brazil are beginning to gain ground.
India, for example, has tripled its installed capacity in renewable energy in recent years, standing out in the field of energy self-consumption with the installation of photovoltaic panels in homes. In this sense, investments in renewable energy on the African continent are also experiencing significant growth, doubling since 2020 and reaching 40.000 million in 2024.
However, inequalities still persist, since investments in distribution networks and storage are significantly lower in these regions compared to advanced countries, which could hamper the expansion of clean energy.
To ensure the success of the energy transition, it is essential that investments in renewables are extended to the regions where they are most needed. It is not only a question of reducing emissions, but also of ensuring that emerging economies have affordable and secure access to clean technology.
As investments in the electricity sector surpass those in fossil fuels, a positive trend towards a more sustainable future that is less dependent on polluting resources is being reaffirmed. Emerging countries, although still lagging behind in investment, are beginning to take on a more relevant role in the global energy transition.