Investment in energy transition reaches $501bn
The latest comprehensive indicator of "energy transition investment" shows that in 2020 the world dedicated a record $501 billion to decarbonisation.
The research, compiled by BloombergNEF (BNEF), shows that, considering the economic uncertainty caused by the pandemic, the investment beat the previous year by 9 percent.
The BNEF report shows that $303.5 billion was invested in new renewable energy capacity by corporations, governments and households in 2020, up 2 percent from 2019.
This was partly due to the largest build-out of solar projects ever and an offshore wind boom of $50bn, BNEF said.
Around $139bn, up 28 percent and a new record, was invested on electric cars and related charging facilities.
Domestic construction of energy-efficient heat pumps hit $50.8bn in other fields of energy transition investment, up 12 percent, while investment in stationary energy storage was $3.6bn, relative to 2019, regardless of dropping unit prices.
Global carbon capture and storage (CCS) investment tripled to $3bn, while hydrogen investment amounted to $1.5bn, decreased 20% but the second-highest annual figure to date.
Albert Cheung, BNEF head of analysis, said: “Our figures show that the world has reached half a trillion dollars a year in its investment to decarbonise the energy system.
“Clean power generation and electric transport are seeing heavy inflows, but need to see further increases in spending as costs fall.
“Technologies such as electric heat, CCS and hydrogen are only attracting a fraction of the investment they will need in the 2020s to help bring emissions under control. We need to be talking about trillions per year if we are to meet climate goals.”
A regional section of BNEF's energy transition investment data indicates that Europe accounted for $166.2 billion (up 67 percent), the highest slice of global investment, with China at $134.8 billion (down 12 percent) and the US at $85.3 billion (down 11 percent).
The success of Europe was powered by a record year for sales of electric vehicles and the greatest year for investment in renewable energy since 2012, BNEF said.
Jon Moore, BNEF CEO, added: “The coronavirus pandemic has held back progress on some projects, but overall investment in wind and solar has been robust and electric vehicle sales jumped more than expected.
“Policy ambition is clearly rising as more countries and businesses commit to net-zero targets, and green stimulus programmes are starting to make their presence felt.
“Some 54% of 2016 emissions are now under some form of net-zero commitment, up from 34% at the start of last year. This should drive increasing investment in the coming years.”