India Among Top 5 Global Destinations In RE Investments: IEA Report  

A latest report by the International Energy Agency (IEA) claimed that India was among the top five countries globally to receive the highest investments in the renewable energy sector since 2019. The report titled ‘World Energy Investment 2023’ explores investment in the global power markets. 

The global report also termed the Indian solar market ‘dynamic.’ However, in Russia and Indonesia, this trend has seen a downturn, it said. The report claimed that only a few countries like China, the United States, European Union, and Japan had received investments in the sector more than India during the period. Furthermore, the report claimed that China takes the lion’s share in the clean energy market with an investment of more than 180 billion USD. In contrast, India has around 20 billion USD in investments in the sector during the period. 

“More than 90% of the increase in clean energy investment since 2021 has taken place in advanced economies and China. There are bright spots elsewhere: for example, solar investment remains dynamic in India; deployment in Brazil is on a steady upward curve ; and investor activity is picking up in parts of the Middle East, notably in Saudi Arabia, the United Arab Emirates and Oman. However, higher interest rates, unclear policy frameworks and market designs, financially-strained utilities and a high cost of capital are holding back investment in many other countries,” the report said. 

“Clean energy is moving fast — faster than many people realize.” IEA Executive Director Fatih Birol. The report said that ‘the investment in solar power is expected to overtake oil for the first time this year as clean energy spending outpaces that for fossil fuels. However, the IEA warned that investment in fossil fuels is rising when it should be falling fast to achieve net zero emissions by 2050.

Birol noted, “This is clear in the investment trends, where clean technologies are pulling away from fossil fuels.” Annual investment in clean energy is expected to have risen by 24 percent from 2021 to more than $1.7 trillion in 2023, noted IEA. The gain for fossil fuels was 15 percent over the same period.

Dwelling on the investment in clean energy and fossil fuels, it said that the investment in both areas was equal only five years ago. But due to factors like high oil and gas prices and a worry about supplies, there has been a spur in the growth of renewables.

“One shining example is an investment in solar, which is set to overtake the amount of investment going into oil production for the first time,” Birol said.

It is expected that the Investment in solar power, essentially photovoltaic panels, to hit $380 billion this year, while investment in oil exploration and extraction should come in at $370 billion.

“This crowns solar as a true energy superpower. The low price of solar power generation will help propel decarbonization efforts as electric car adoption progresses. But the rebound in oil and gas investment, which is expected to return to 2019 levels this year, puts the industry further away from the IEA’s 2050 net zero trajectories,” said Dave Jones, Head of data insights at the energy think tank Ember.

Also, according to IEA, the overall 2023 fossil fuel investment is expected to be more than double the amount the sector should be spending in 2030. For coal, it could hit six times the amount.

“The irony remains that some of the sunniest places in the world have the lowest levels of solar investment, and this is a problem that needs attention,” said Jones.

The IEA also expressed concern that major energy firms are not investing considerable funds into the transition to green energy. Around five percent of their cash flow last year went to low-carbon and renewable energies or carbon capture projects and around a quarter of the amount paid to shareholders overall. 

The report can be accessed here.