Coal and wind turbine in Hohenhamelin, Germany, April 11, 2022. Some major economies have made plans in recent months to reduce Russia’s dependence on hydrocarbons.
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Global energy investment will increase by more than 8% in 2022 to $ 2.4 trillion., with a significant increase in coal supply chains, but much more money will be needed if climate-related goals are to be met., According to the International Energy Agency.
Released on Wednesday, the latest version of the IEA’s World Energy Investment Report said clean energy investment will exceed $ 1.4 trillion this year and will account for “nearly three-quarters of overall energy investment growth.”
While the agency welcomed this, it noted the great work that goes into it.
“The average annual growth rate of clean energy investment in the five years following the signing of the Paris Agreement in 2015 was just over 2%,” he said.
Since 2020, this rate has risen to 12%. The IEA described this as “less than what is needed to achieve international climate goals, but it is still an important step in the right direction.”
IEA Executive Director Fatih Birol highlighted the challenges and opportunities facing the planet in light of the current situation.
“We can’t ignore the current global energy crisis or the climate crisis, but the good news is that we don’t have to choose between them; we can deal with both at the same time,” he said.
Birol added that “a huge increase in investment to accelerate the transition to clean energy” is “the only sustainable solution.”
“This type of investment is on the rise, but we need a much faster rise due to high fossil fuel prices to ease the pressure on consumers, make our energy systems safer and put the world on track to meet our climate goals.”
Spending unequally distributed
While the investment was welcome, a statement accompanying the IEA report stated that growth in clean energy spending is unevenly distributed, with the advanced economies and the majority being China.
In addition, some markets are seeing high prices and energy security concerns are “leading to greater investment in fossil fuel supply, especially coal.”
According to the IEA report, about $ 105 billion was invested in 2021 in what it called the “coal supply chain”. This was an increase of 10% compared to 2020. The industry is expected to continue on a similar path this year.
“Investment in global coal supply is expected to grow by another 10% in 2022 as tight supply continues to attract new projects,” he said. “With more than $ 80 billion, China and India are expected to make up the bulk of global coal investment by 2022.”
The U.S. Energy Information Administration lists a range of emissions from coal burning. These include carbon dioxide, sulfur dioxide, particulate matter and nitrogen oxides.
Greenpeace, for its part, said coal was “the dirtiest, most polluting way to produce energy.”
Challenging the global environment
The IEA report comes at a time of rising inflation, a steady rise in oil and gas prices and the geopolitical tensions associated with the Russia-Ukraine war.
These factors have created a very difficult environment for businesses, governments and consumers. The energy sector is no different.
“Nearly half of the additional $ 200 trillion in capital investment by 2022 is likely to eat up higher costs, rather than bring additional capacity or savings for energy supply,” the IEA said.
He added that the cost of solar panels and wind turbines, which are key technologies for the energy transition, had risen by “between 10% and 20% from 2020 to 2020” after a decline.
People around the world are also feeling a little overwhelmed: in 2022, the total energy bill for consumers is expected to exceed $ 10 trillion for the first time, according to the IEA report.
“High prices are driving some countries to increase investment in fossil fuels,” the report said, “because they want to secure and diversify supply sources.”
Some major economies have made plans to reduce Russia’s dependence on hydrocarbons in recent months, which has led to difficult situations.
In Europe, for example, Russian gas flow reductions and a complete supply disruption spectrum have prompted some governments to consider returning coal.
Germany, Italy, Austria and the Netherlands have said coal-fired power plants could be used to offset a reduction in Russia’s gas supply.
Clean energy is set to rise by $ 1.4 trillion in 2022, according to the IEA
Source link Clean energy is set to rise by $ 1.4 trillion in 2022, according to the IEA