The world is finally spending more on solar than on oil production

The International Energy Agency has just announced annual report on global investment in energy, where it tally all that cash. The world has seen about $2.8 trillion in energy investments by 2022, with about $1.7 trillion of that going to clean energy.

That’s the biggest one-year investment in clean energy ever, and where it’s going is pretty exciting. I have some good news, some bad news, and some surprising tidbits to share. So let’s grab some popcorn and dive into the data.

Fossil fuels are slowing down

Let’s start with what I consider good news: a lot of money is being poured into clean energy—including renewables, nuclear, and things that cut emissions, like electric cars and heat pumps. And it’s not just a lot of money, but a lot more money spent on fossil fuels. By 2022, for every dollar spent on fossil fuels, $1.70 will be spent on clean energy. Just five years ago, it even died.

The growing dominance of clean energy is especially evident when it comes to solar power. In 2023, investment in solar energy is expected to beat investment in oil production for the first time. That’s a stark difference from the picture a decade ago, when oil spending outstripped solar spending by nearly 6:1.

While we’re using oil and gas, I think it’s important to point out a really interesting point: while a lot of money goes into clean energy, it doesn’t make up a large portion of the spending of natural gas companies. fossil material.

Do you see those little dark pieces in 2021 and 2022? That’s what oil and gas companies spend on clean energy. Spending on oil infrastructure has fallen (which allows solar to catch up), but companies are making up for it by paying dividends, buying back shares, and paying down debt instead of investing more into low emission technology.

Any investment and attention given to renewable energy and innovation that can help cut emissions is very good and I think oil and gas companies can play a role in driving new technologies. , especially the technologies they have expertise in (I’m looking at you, geothermal!). But I think it’s important to keep that spending in context—oil and gas companies are investing less money in renewables than they are. advertising campaigns that will make you think.

bring it in

In the clean energy sector, most spending will go to renewables such as wind and solar, grid upgrades and efforts to improve energy efficiency.

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