Energy Transition Investment Hits Record $2 Trillion in 2024

Investment in the global energy transition has reached an unprecedented $2.1 trillion in 2024, marking a significant milestone in the shift towards low-carbon energy solutions. This growth, driven primarily by electrified transport and renewable energy, highlights both the progress made and the challenges that lie ahead in achieving net-zero emissions by 2050.

Key Takeaways

• Global investment in energy transition technologies grew by 11% in 2024.

• Electrified transport led the investment surge, totaling $757 billion.

• China accounted for the largest share of investment, with $818 billion.

• Investment in emerging technologies like hydrogen and carbon capture fell by 23%.

• An average of $5.6 trillion per year is needed from 2025 to 2030 to meet net-zero targets.

Record Investment Figures

According to the latest report from BloombergNEF (BNEF), the energy transition investment has surpassed $2 trillion for the first time, reflecting a robust commitment to sustainable energy solutions. The breakdown of investments is as follows:

1. Electrified Transport: $757 billion

2. Renewable Energy: $728 billion

3. Power Grids: $390 billion

Regional Insights

China has emerged as the dominant player in energy transition investments, contributing $818 billion, which represents a 20% increase from the previous year. This growth accounted for two-thirds of the global increase in investment.

In contrast, the United States saw stagnant investment levels at $338 billion, while the European Union and the United Kingdom experienced declines, with investments of $375 billion and $65.3 billion, respectively. Other countries like India and Canada also contributed positively, with increases of 13% and 19% in their investments.

Challenges in Emerging Technologies

While mature technologies such as renewables and energy storage saw significant growth, investments in emerging technologies like hydrogen and carbon capture dropped by 23% to just $155 billion. This decline is attributed to several factors:

• Affordability: High costs hinder widespread adoption.

• Technology Maturity: Many emerging technologies are still in developmental stages.

• Commercial Scalability: Lack of established business models limits investment.

To bridge this gap, both public and private sectors must collaborate to de-risk these technologies and encourage investment.

Future Investment Needs

BNEF's report emphasizes that to align with global net-zero goals by 2050, an average investment of $5.6 trillion per year is necessary from 2025 to 2030. Current investment levels are only 37% of what is required, indicating a significant investment gap that varies by region and technology.

Conclusion

The record investment in the energy transition reflects a growing recognition of the need for sustainable energy solutions. However, the slower growth rate and challenges in emerging technologies underscore the need for continued innovation and collaboration to achieve global climate goals. As the world moves forward, the focus must remain on scaling up investments in both mature and emerging sectors to ensure a sustainable future for all.

Sources

• Global Investment in the Energy Transition Exceeded $2 Trillion for the First Time in 2024, According to BloombergNEF Report, BloombergNEF.