While recent data on renewable energy deployment point to a new era when “a trillion dollars of investment is the floor, not the ceiling,” those numbers only track a fraction of the accelerating effort to bring decarbonization technologies into the mainstream, BloombergNEF senior contributor Nat Bullard writes in a recent opinion piece.
BloombergNEF reported that global energy transition investment exceeded US$1.1 trillion last year, the International Energy Agency placed the total at $1.7 trillion, and new wind and solar installations are expected to top the 440-gigawatt mark this year. But now, Bullard writes, BloombergNEF is beginning to dig into an even more important metric.
“Invested dollars flow into things, or more precisely, assets,” he explains. “Last year’s $1.1 trillion of investment financed the construction of wind and solar farms and electric vehicle charging networks and large-scale batteries. Millions of heat pumps and millions of electric vehicles, too.”
But that’s just a fraction of the capital flows supporting decarbonization. When BloombergNEF looked at 8,000 publicly-traded companies with “explicit revenue exposure to clean energy,” Bullard writes, the total came to a cool $2.56 trillion. Electrified transport led the list as the busiest sector, at $369 billion, followed by nuclear at $332 billion, solar at $268 billion, and wind at $245 billion.
The investment and revenue numbers overlap somewhat, and that’s where the details start to get complicated—the columnist walks his readers through the way BloombergNEF measures zero-carbon electricity sales, assesses supply chain income for energy transition goods and services, and factors in fossil industry investments in the energy transition that accounted for less than 10% of last year’s total. (They’ve been cutting back drastically since.)
In the end, the analysis puts clean energy revenues at 2.6% of global GDP in 2022. “For the climate’s sake, we need clean energy’s contribution to GDP to increase for decades to come,” Bullard writes.