According to IEA’s report “World Energy Investment”, Global energy investment has reached a decisive inflection point. In 2024, total investment is projected to surpass USD 3 trillion for the first time, with clean energy technologies and infrastructure commanding two-thirds of this amount—around USD 2 trillion. This marks a momentous shift: the world now invests nearly twice as much in clean energy as it does in fossil fuels.
Yet, beneath this impressive growth lie stark regional imbalances. While advanced economies and China dominate global clean energy flows, emerging markets and developing economies (EMDEs) outside China account for just 15% of clean energy investment. With rising climate ambition—reflected in goals set at COP28, including tripling renewable energy capacity and doubling energy efficiency by 2030—such disparities must be addressed urgently. Without a more equitable distribution of investment, global decarbonization goals are unlikely to be met.
At the heart of this transformation are solar photovoltaics (PV), grid modernization, and energy storage. Solar PV, in particular, is poised to receive more than USD 500 billion in 2024, outpacing all other electricity generation technologies combined. Battery storage, a key enabler of intermittent renewable power, is also witnessing an investment boom, projected to exceed USD 50 billion.
Since 2020, clean energy investment has grown rapidly, propelled by falling technology costs, improved policy support, and energy security concerns. Solar module prices have dropped by 30% over the past two years, and battery metal prices such as lithium and cobalt have fallen sharply. These trends have enhanced the competitiveness of renewables, particularly solar and wind, which now deliver 2.5 times more energy per dollar invested than they did a decade ago.
However, progress remains uneven. China, the United States, and the European Union together account for more than 70% of global clean energy investment. Meanwhile, the rest of Asia, Latin America, and Africa—home to billions of people—continue to face disproportionately high capital costs and limited access to concessional finance. Africa’s clean energy investment is expected to reach over USD 40 billion in 2024—double the level in 2020—but still modest compared to its needs.
Moreover, grids are emerging as a critical bottleneck. Investment in electricity grids stagnated for years around USD 300 billion annually but is now expected to rise to USD 400 billion in 2024, led by Europe, China, and the United States. Nonetheless, in many EMDEs, inadequate grid infrastructure continues to constrain the integration of new renewables. In Southeast Asia and sub-Saharan Africa, grid expansion is lagging behind energy demand growth.
The structure of energy finance is evolving. Private corporations remain the dominant investors, accounting for nearly three-quarters of total energy investment. But households are also playing a growing role, particularly in advanced economies, where they have driven over 40% of the growth in clean energy spending since 2016. This surge is fueled by demand for electric vehicles (EVs), rooftop solar, and energy-efficient appliances.
Yet, higher interest rates, inflation, and declining fiscal space have dampened public and private appetite for clean energy spending in 2023. Sustainable debt issuance fell by 14% compared to 2022, and inflows to ESG-related funds stagnated. In the United States, ESG investment has come under political scrutiny, further weakening investor confidence. Even in Europe, the heartland of sustainable finance, fund managers are re-evaluating strategies.
Development finance institutions (DFIs) remain underutilized. Although they can de-risk projects and attract private capital in EMDEs, DFIs account for just 1% of total energy finance. Most DFI support comes in the form of debt, often in hard currency, which amplifies currency risk and limits accessibility for low-income countries. Equity and grant-based support remains extremely limited, hindering the development of bankable clean energy projects.
Despite the surge in clean energy, fossil fuels continue to attract major investment. Upstream oil and gas investment is projected to rise to USD 570 billion in 2024, up 7% from the previous year. This increase is primarily driven by national oil companies (NOCs) in the Middle East and Asia, which now account for over 40% of global upstream spending. Most of this investment targets short-cycle, low-cost projects that can weather demand uncertainty.
Meanwhile, liquefied natural gas (LNG) is experiencing a new wave of expansion. Recently sanctioned projects, mainly in the United States and Qatar, are expected to boost global LNG capacity by 50% by 2030. However, many of these new volumes lack committed end-users, raising concerns about market oversupply in the latter half of the decade.
Coal, too, is witnessing a surprising resurgence. Over 50 GW of unabated coal-fired power generation was approved in 2023—the highest since 2015—and nearly all of it was in China. Investment in coal supply is projected to surpass USD 160 billion in 2024, with India and Indonesia also increasing domestic coal production to meet short-term demand.
In contrast, low-emissions fuels such as hydrogen and sustainable bioenergy remain underfunded. Hydrogen investment, while set to grow by 140% in 2024, still accounts for only a fraction of fossil fuel spending. Investment in carbon capture, utilization, and storage (CCUS) is rising, but remains highly concentrated in a few high-income countries.
To meet the targets set at COP28—especially tripling renewable energy capacity and doubling energy efficiency by 2030—the world needs to mobilize an additional USD 500 billion per year in clean energy investment. This is particularly urgent in EMDEs outside China, where investment levels must quadruple to be on track with the IEA’s Net Zero Emissions Scenario.
Achieving this requires systemic reforms:
The global energy investment landscape is at a crossroads. While the momentum behind clean energy is stronger than ever, it is not yet fast enough—or equitable enough—to deliver a net-zero future. Without targeted policies, institutional reforms, and capital mobilization in underserved regions, the risk of a fragmented, two-speed energy transition remains high. The next five years will be critical to ensuring that this historic shift toward clean energy is not only accelerated, but also inclusive and resilient.
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