Investments in clean energy projects reach 2 trillion US dollars

By Alimat Aliyeva

The International Energy Agency (IEA) has published the "Global Energy Outlook 2024" ("World Energy Outlook 2024"), Azernews reports.

The report examines scenarios that will shape the global energy landscape in 2024 - renewable sources, electric mobility, LNG, artificial intelligence and uncertainty in electricity demand due to abnormal heat.

The report emphasizes that geopolitical risks remain a serious challenge to global energy security. However, key market balances are weakening, creating more intense competition between different fuels and technologies. Thus, in the second half of the 2020s, there may be a significant increase in production capacity for key clean energy technologies such as solar photovoltaic (PV) systems and batteries, as well as an oversupply of oil and LNG.

The IEA believes that accelerating clean energy production in the face of low fossil fuel prices poses various challenges. Thus, in 2023, more than 560 gigawatts (GW) of new renewable energy sources were added worldwide. Investments in clean energy projects are approaching $2 trillion per year, which is almost double the total amount spent on new supplies of oil, gas and coal. This capital increase increased the renewable energy production capacity from 4,250 GW today to a projected 10,000 GW by 2030 in the STEPS scenario. Although this is below the triple target set at COP28, it is sufficient to meet the projected growth in global electricity demand.

The Agency also notes that the use of clean energy varies in different technologies and countries. For example, China provided 60 percent of the world's renewable energy capacity added in 2023. According to the IEA, it is expected that in the early 2030s, the production of solar photovoltaic energy in China will exceed the current demand for electricity in the United States. The report highlights the challenges of integrating this new renewable energy into energy systems and questions whether infrastructure expansion will meet demand.

The report highlights that as the world moves towards a more electrified energy system, global demand for electricity is growing. Over the past decade, electricity consumption has grown twice as fast as total energy demand, with two thirds of this growth coming from China. Driven by factors such as light industry consumption, electric mobility, cooling systems and artificial intelligence data centers, global electricity demand is projected to increase by 6 percent, or 2,200 terawatt hours, in 2035 compared to the previous year's forecast.

According to the IEA, although artificial intelligence and data centers are important, they are not the only factors driving the growth of electricity demand. Thus, more frequent and intense heat waves and higher standards for appliances such as air conditioners could increase global cooling demand by more than 1,200 terawatt hours by 2035, equivalent to the entire electricity consumption in the Middle East.

The agency highlights the potential for a faster transition to clean energy through extensive production facilities for technologies such as solar photovoltaic systems and lithium-ion batteries. According to the report, solar energy production will increase sixfold and exceed 1,100 GW per year.

The World Energy Outlook 2024 concludes with a clear message: the world has the opportunity to accelerate the movement towards a cleaner energy future, but this requires concerted global action. According to the report, investments in clean energy, policy commitments and technological innovations are crucial to meet the growing demand for energy while reducing dependence on fossil fuels.

The IEA predicts that by 2030, clean energy may be enough to meet all new global energy demand. However, challenges remain, especially in achieving goals such as doubling the global rate of energy efficiency improvement by 2030. According to the report, despite the progress made, without a stronger political framework and coordinated international efforts, it will be difficult for humanity to achieve these goals.