Coal and wind turbines in Hohenhameln, Germany, April 11, 2022. Many major economies have developed plans to reduce Russia’s dependence on hydrocarbons in recent months.
Born Butcher | Picture Alliance | Getty Images
Global energy investment is expected to surge by more than 8% in 2022 to reach $ 2.4 trillion., Coal supply chains have risen significantly, but much more money will be needed to reach climate-related goals., According to the International Energy Agency.
Clean energy investment has exceeded $ 1.4 trillion this year, accounting for “almost three-quarters of total energy investment growth,” according to the latest edition of the IEA’s Global Energy Investment Report released Wednesday.
The agency welcomed this, but pointed out the enormous amount of work ahead.
“The average annual growth rate of clean energy investment in the five years since the signing of the Paris Agreement in 2015 was just over 2%,” he said.
Since 2020, that percentage has increased to 12%. “It’s not enough to meet the international climate goals, but it’s still an important step in the right direction,” the IEA said.
Fatih Birol, Managing Director of the IEA, highlighted the challenges and opportunities facing the planet in light of the current situation.
“We can’t afford to ignore either the global energy crisis or the climate crisis today, but the good news is that we don’t have to choose between them. We can work on both at the same time,” he said. Told.
Birol added that “a significant surge in investment to accelerate the transition to clean energy” is “the only lasting solution.”
“While this type of investment is on the rise, it’s much quicker to ease consumer pressure from rising fossil fuel prices, make energy systems safer, and get the world on track for climate goals. Need an increase. “
Investment was welcomed, but a statement accompanying the IEA’s report stated that increased clean energy spending was unevenly distributed, dominated by developed and China.
In addition, he said high prices were seen in some markets and energy security concerns were driving “increased investment in fossil fuel supplies, especially coal.”
According to the IEA report, in 2021, about $ 105 billion was invested in what is called the “coal supply chain.” This represents a 10% increase compared to 2020. The industry is expected to follow a similar path this year.
“Global coal supply investment is expected to increase by another 10% in 2022 as tight supply continues to attract new projects,” he said. “China and India have exceeded US $ 80 billion and are expected to account for the majority of global coal investment in 2022.”
The US Energy Information Administration lists the various emissions from burning coal. These include carbon dioxide, sulfur dioxide, particulate matter and nitrogen oxides.
As part of that, Greenpeace describes coal as “the dirtiest and most polluted way to produce energy.”
The IEA’s report has come during a period of rising inflation, sustained rises in oil and gas prices, and geopolitical tensions associated with the war between Russia and Ukraine.
These factors have created a very difficult environment for businesses, governments, and consumers. The energy sector is no exception.
“Almost half of the US $ 200 billion capital investment added in 2022 is likely to be exhausted at higher costs rather than providing additional energy supply capacity and savings,” the IEA said.
He added that the costs of solar panels and wind turbines, which are essential technologies for energy transformation, have been declining for a period of time and are now “up 10% to 20% from 2020.”
People around the world are also in a pinch, according to the IEA report. Total consumer energy prices in 2022 are expected to exceed $ 10 trillion for the first time.
“High prices are encouraging some countries to step up their investment in fossil fuels,” the report said. “They are trying to secure and diversify their sources.”
Many major economies have developed plans to reduce Russia’s dependence on hydrocarbons in recent months, which in turn has led to some difficult situations.
In Europe, for example, Russia’s gas flow is diminishing and there are concerns about a complete supply disruption. He urged some governments to consider returning to coal.
Germany, Italy, Austria and the Netherlands have all shown that coal-fired power plants can be used to compensate for Russia’s declining gas supply.
— CNBC’s Sam Meredith contributed to this report