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.
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“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.
