‘Energy transition’ investment hits $501bn
A new, broad measure of "investment in the energy transition" shows that in 2020 the world committed a record $501 billion to decarbonisation.
The analysis, compiled by BloombergNEF (BNEF), reveals that, despite the economic disruption caused by the pandemic, the investment beat the previous year by 9 percent.
The BNEF analysis shows that $303.5 billion was invested in new renewable energy capacity by businesses, governments and households in 2020, up 2 percent from 2019.
This was partly due to the largest build-out of solar projects ever and an offshore wind surge of $50bn, BNEF said.
Around $139bn, up 28 percent and a new record, was spent on electric vehicles and associated charging infrastructure.
Domestic installation of energy-efficient heat pumps reached $50.8bn in other areas of energy transition investment, up 12 percent, while investment in stationary energy storage was $3.6bn, compared to 2019, despite falling unit prices.
Global carbon capture and storage (CCS) investment tripled to $3bn, while hydrogen investment amounted to $1.5bn, down 20% but the second-highest annual number to date.
Albert Cheung, head of the BNEF analysis, said: "Our figures show that the world's investment in decarbonising the energy system has reached half a trillion dollars a year."
“Clean power generation and electric transport are seeing heavy inflows, but need to see further increases in spending as costs fall.
“Technologies such as electric heat, CCS and hydrogen are only attracting a fraction of the investment they will need in the 2020s to help bring emissions under control. We need to be talking about trillions per year if we are to meet climate goals.
A geographical division of BNEF's energy transition investment data shows that Europe accounted for $166.2 billion (up 67 percent) of the largest slice of global investment, with China at $134.8 billion (down 12 percent) and the US at $85.3 billion (down 11 percent ).
The performance of Europe was driven by a record year for sales of electric vehicles and the best year for investment in renewable energy since 2012, BNEF said.
BNEF CEO Jon Moore added: “The coronavirus pandemic has held back progress on some projects, but overall investment in wind and solar has been robust and electric vehicle sales jumped more than expected.
“Policy ambition is clearly rising as more countries and businesses commit to net-zero targets, and green stimulus programmes are starting to make their presence felt.
“Some 54% of 2016 emissions are now under some form of net-zero commitment, up from 34% at the start of last year. This should drive increasing investment in the coming years.”