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Global clean energy investment hits record level – but still not high enough


Graphic of charts and graphs with background of onshore wind farm Photo: Adobe Stock
Global investment in the energy transition increased by 17% in 2023, reaching a new record level of $1.77tn

Photo: Adobe Stock

Global investment in the low-carbon energy transition surged 17% in 2023, reaching a new record level of $1.77tn, according to a new report by BloombergNEF (BNEF). However, the market analyst warns that the current level of investment in clean energy technologies is not nearly sufficient to set the world on track for net zero by mid-century.

The Energy Transition Investment Trends 2024 report finds that electrified transport is now the largest sector for spending in the energy transition, growing 36% in 2023 to $634bn. This figure includes spending on electric cars, buses, two- and three-wheelers, and commercial vehicles, as well as associated infrastructure.


Electrified transport overtook the renewable energy sector, which saw an 8% increase to $623bn. This figure reflects investment to construct renewable energy production facilities, such as wind, solar, geothermal power plants and biofuels production plants. Power grid investment was the third-largest contributor at $310bn. Grids are a critical enabler for the energy transition, and investment in them will need to rise in coming years.


‘Last year brought new records for global renewable energy investment. Strong growth in the US and Europe drove the global rise, even as China, the world’s largest renewables market, sputtered, recording an 11% drop. Despite a year of tough headlines, a record amount of offshore wind capacity also reached financial close,’ comments Meredith Annex, BNEF’s Head of Clean Power and co-author of the report.


There was also strong growth in emerging areas such as hydrogen (with investment tripling year-on-year), carbon capture and storage (near-doubling) and energy storage (up 76%).


The largest country for investment by far was China, with $676bn invested in 2023 – equivalent to 38% of the global total. Although China remains dominant, its lead has been reduced. Taken together, the European Union, US and UK outpaced China with $718bn of investment – a feat they hadn’t managed to achieve in 2022. Investment in the US jumped 22% year-on-year, to $303bn, as the effects of the Inflation Reduction Act started to be felt, the report notes.  


However, the report warns that the current level of investment in clean energy technologies is not nearly sufficient to set the world on track for net zero by mid-century. Energy transition investment would need to average $4.8tn/y from 2024 to 2030 to align with BNEF’s Paris Agreement-aligned net zero scenario trajectory. This is nearly three times the total investment observed in 2023.


‘Our report shows just how quickly the clean energy opportunity is growing, and yet how far off track we still are,’ said Albert Cheung, Deputy Chief Executive Officer, BNEF. ‘Energy transition investment spending grew 17% last year, but it needs to grow more than 170% if we are to get on track for net zero in the coming years. Only determined action from policymakers can unlock this kind of step-change in momentum.’


In addition, BNEF’s report finds that investment in the global clean energy supply chain, including equipment factories and battery metals production for energy technologies, hit a new record at $135bn in 2023 (up from just $46bn in 2020), and is set to surge further over the next two years. BNEF projects this figure is to rise to $259bn by 2025, based on currently announced investment plans. In the next two years, only the wind sector needs to increase its supply chain investment to get on track for a net-zero trajectory; the other areas are investing at a sufficient pace.