Although global energy transition investment grew 20% last year, to US$2.4 trillion, the total still falls short of what’s needed to triple global renewable energy capacity—and fossil fuel spending is still on the rise, a new analysis concludes this week.
“Funding for renewables is soaring but remains highly concentrated in the most advanced economies,” said Francesco La Camera, director general of the International Renewable Energy Agency, commenting on the report released by IRENA and the Climate Policy Initiative. “As countries gather at COP30,” he added, “scaling finance for emerging and developing countries is essential to make the transition truly inclusive and global.”
Within the wider energy transition sector, the report shows renewable energy investment growing just 7.3%, to $807 billion, a far slower increase than the 32% jump from 2022 to 2023. Almost all the investment went to the power sector, with solar photovoltaic spending up 49%, to $554 billion.
Renewable power, grids, and battery storage received $1.19 trillion in investment, just fractionally more than the $1.13 trillion that poured into fossil fuel projects.
IRENA and CPI pointed to a serious gap in funding capacity between advanced and major economies, where renewable energy developers have access to domestic investment, and poorer countries that depend on external support due to limited financial markets and fiscal capacity, high capital costs, and vulnerability to high debt levels.
“Globally, nearly half of total investment in 2023 was provided as debt, most of it at market rates,” IRENA said in a release. “The rest was invested through equity. Grants accounted for less than 1%. The urgent need to mobilize investments, combined with a scarcity of impact-driven capital such as low-cost debt and grants, risks exacerbating debt burdens.”
Using 2022/23 figures, the report showed China leading the world in renewable investment, at $332 billion, followed by a list of advanced economies at $214 billion. Unique among the countries and regions in the analysis, China funded 64% of the activity with public domestic investment.
The analysis also points to a 21% drop in energy transition supply chain investments between 2023 and 2024, with 76% of the remaining total occurring in China. Investor support for wind nacelle factories fell by 80%, and for solar photovoltaic batteries by 72%, while battery factory investment grew 112%, to $74.5 billion.
