Despite global energy crises and governments backtracking on their carbon pledges, the clean energy sector received a record $1.1 trillion investment in 2022, according to Bloomberg New Energy Finance (BNEF).
The report indicates that every sector, including renewables, energy storage, hydrogen, carbon capture and storage (CCS), electrified transport, electrified heat, and sustainable materials, achieved record levels of investment. Renewable energy received the largest share of investment, with $495 billion, followed by electrified transport with $466 billion, up 54% year-on-year. While the hydrogen sector received the least financial commitment, it tripled investment thanks to strong interest from the private sector and growing policy support.
China emerged as the new epicenter of clean energy investment, surpassing Europe, which previously held the spot. China invested $546 billion in renewables in 2022, triple the European Union’s total spend of $180 billion and the US’s $141 billion. The United States fell to a distant second place with $141 billion in clean energy investment, while the European Union would have come in second if considered as a single bloc, with a total investment of $180 billion. Germany maintained its third-place position, while the UK dropped to fifth place, and France climbed to fourth place.
The renewable energy sector’s growth has several reasons, including the International Energy Agency‘s (IEA) prediction that Russia’s invasion of Ukraine would accelerate the world’s transition to clean energy from fossil fuels. In the EU, the loss of Russian oil and gas has forced countries to consider both new and old technologies, with the country ramping up renewable energy spend while also restarting coal plants. Some areas, such as China, are investing in an “all of the above” approach that includes heavy renewables investment along with investment in coal and other fossil fuel resources.
Renewable fuels can also be cheaper than fossil fuels, especially in the power generation world. The EIA’s Levelized Costs of Electricity (LCOE) report reveals that in many areas, wind and solar are competitive with other power sources when subsidies are considered.
Despite the challenges, the clean energy sector’s impressive investment performance indicates that the world’s energy system is shifting towards cleaner, more affordable, and secure energy. BNEF’s report projects that global clean energy investments will nearly double to $2 trillion by 2030.