Clean Energy Investment to Surpass Fossil Fuels
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Clean Energy Investment to Surpass Fossil Fuels

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Perla Velasco By Perla Velasco | Journalist & Industry Analyst - Tue, 05/30/2023 - 09:37

The International Energy Agency (IEA) published this year's edition of the World Energy Report, providing a comprehensive outlook on global energy investment trends. The report reveals that clean energy is on the brink of a major breakthrough, with global investment projected to reach US$1.7 trillion in 2023, surpassing oil production for the first time in history.

Driven by affordability and security concerns triggered by the ongoing global energy crisis, investment in clean energy technologies is outpacing spending on fossil fuels. The report underscores the growing momentum behind sustainable options, highlighting the significant shift in the energy landscape.

According to IEA's report, approximately US$2.8 trillion is expected to be invested in the energy sector globally in 2023. Of this amount, more than US$1.7 trillion is earmarked for clean technologies, including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps. The remaining funds, just over US$1 trillion, will be directed toward coal, gas and oil.

The report also highlights remarkable growth in clean energy investment, with annual figures projected to surge by 24% between 2021 and 2023. This surge is primarily driven by the renewables and electric vehicle sectors. In contrast, fossil fuel investment is expected to increase by 15% over the same period. However, the report cautions that more than 90% of this clean energy investment increase originates from advanced economies and China. This discrepancy raises concerns about potential disparities in global energy transitions if other regions fail to accelerate their clean energy efforts.

Solar energy takes the lead in this renewable revolution, as low-emissions electricity technologies are anticipated to account for nearly 90% of investment in power generation. Consumers are also embracing electrified products, as evidenced by the double-digit annual growth in global heat pump sales since 2021. Furthermore, electric vehicle sales are expected to soar by one-third this year, building on the remarkable surge experienced in 2022.

Energy Policy Sets Back Wind Energy in Mexico

Contrary to these positive expectations, Mexico's wind energy production has faced setbacks under the current federal administration's energy policy, according to an analysis by Energy Monitor (EM). Data from the Global Wind Energy Council (GWEC) revealed that in 2022, installed wind energy capacity in Mexico grew by a mere 2.2%, or 158MW, marking the smallest growth in the sector since 2011. The country had reached its peak in new wind installations in 2019, with 1,280MW, benefiting from the previous energy reform's push for renewable energy. However, Mexico has since lost momentum, leading to concerns about the stagnation of the wind energy sector.

Photo by:   patruflo

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