- Global energy investment is set to increase in 2025 to a record $3.3 trillion.
- This year, electricity investments are set to be some 50 per cent higher than the total amount being spent bringing oil, natural gas, and coal to market.
Global energy investment is set to increase in 2025 to a record $3.3 trillion. This is despite headwinds from elevated geopolitical tensions and economic uncertainty, a new IEA report says, with clean energy technologies attracting twice as much capital as fossil fuels.
Investment in clean technologies – renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification – is on course to hit a record $2.2 trillion this year, reflecting not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions, according to the 2025 edition of the IEA’s annual World Energy Investment report.
Investment in oil, natural gas and coal is set to reach $1.1 billion. In addition to a comprehensive assessment of the current investment landscape across fuels, technologies and regions, this 10th edition of the World Energy Investment report explores some of the major changes over the past decade.
“Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record $3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks,” said IEA Executive Director Fatih Birol.
Birol noted, “The fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas, we have yet to see significant implications for existing projects.”
Over the past decade, China’s share of global clean energy spending has risen from a quarter to almost a third, underpinned by strategic investments in a wide range of technologies, including solar, wind, hydropower, nuclear, batteries and EVs.
At the same time, global spending on upstream oil and gas is gravitating towards the Middle East.
Today’s investment trends clearly show a new Age of Electricity is drawing nearer. A decade ago, investments in fossil fuels were 30 per cent higher than those in electricity generation, grids and storage.
This year, electricity investments are set to be some 50 per cent higher than the total amount being spent bringing oil, natural gas and coal to market.
Globally, spending on low-emission power generation has almost doubled over the past five years, led by solar PV.
Investment in solar, both utility-scale and rooftop, is expected to reach $450 billion in 2025, making it the single largest item in the global energy investment inventory. Battery storage investments are also climbing rapidly, surging above $65 billion this year.
Capital flows to nuclear power have grown by 50 per cent over the past five years and are on course to reach around $75 billion in 2025.
Rapid growth in electricity demand also underpins continued investment in coal supply, mainly in China and India.
In a worrying sign for electricity security, investment in grids, now at $400 billion per year, is failing to keep pace with spending on generation and electrification.
Maintaining electricity security would require investment in grids to rise towards parity with generation spending by the early 2030s. However, this is being held back by lengthy permitting procedures and tight supply chains for transformers and cables.