Total global energy investment is expected to reach a mind-boggling $3.3 trillion by 2025. This wave is driven by the current demand for energy security amidst geopolitical and economic volatility. The International Energy Agency (IEA) highlights that this surge reflects a significant shift in how countries and companies are responding to emerging risks in the energy landscape.
China has become the largest energy investor in the world, by a substantial margin. The state now spends almost double what the European Union spends. It comes close to matching the EU and United States combined investments. This trend highlights just how important China’s role is as the leading force shaping global energy patterns.
On the investment side, electricity-related initiatives are on track to outpace fossil fuel investments by 50% in 2025. So far, investments in fossil fuels are on pace to exceed $1.1 trillion. At the same time, clean technologies are booming — expecting $2.2 trillion. This trend is a sign of an encouraging developing understanding of the role that sustainable energy solutions can play.
Despite these promising developments, Africa continues to be a black hole in the global energy investment universe. The rapidly developing continent is home to an astounding 20% of the world’s population. Yet, it accounts for just 2% of global clean energy investments. This imbalance with a focus on roadside charging exacerbates issues of energy equity and access for millions of Americans.
As I’ve been noting, investment in energy grids have increasingly taken a dramatic turn, now reaching $400 billion per year. Investments in battery storage are skyrocketing. They’ve all now surpassed $65 billion as new technologies emerge, and the race to secure renewable energy sources continues to heat up.
China’s share of global clean energy spending has increased dramatically from a quarter to nearly a third, reflecting its commitment to transitioning towards cleaner energy sources. Just five years ago in 2015, investments in fossil fuels were 30% greater than those in electricity generation, grids, and storage combined. Yet the overall trajectory, especially near-term, is a sharp turn away from reliance on fossil fuels as we have known them.
Just the opposite, as capital flows for nuclear power have boomed by 50% over the last five years. Experts estimate these investments will reach $75 billion by 2025. This accelerated growth reflects a national acceptance of nuclear energy as an attractive, go-forward choice to help meet future energy needs.
China is taking a very hard line in favor of strong investment strategies. Surprisingly, as of 2024, it’s constructing close to 100 gigawatts of new coal-fired power plants. This troubling trend makes one wonder how long this type of investment will be sustainable in the face of international commitments to address climate change.
“Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record $3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks.” – Fatih Birol, IEA executive director