Global energy investment to touch record $3.3 trillion in 2025; clean energy to attract $2.2 trillion: IEA

Time of India

2 days ago

New Delhi:
Global energy investment
is set to reach an all-time high of $3.3 trillion in 2025, with clean energy technologies accounting for $2.2 trillion—double the expected investment in
fossil fuels
, according to the
International Energy Agency
's (IEA) World Energy Investment 2025 report.
The report projects that investment in oil, natural gas and coal will total $1.1 trillion. The surge in clean energy spending reflects the influence of industrial policies,
energy security
concerns and the growing cost competitiveness of electricity-based solutions, the IEA said.
IEA Executive Director Fatih Birol said, '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.'
He added, 'When the IEA published the first ever edition of its World Energy Investment report nearly ten years ago, it showed energy investment in China in 2015 just edging ahead of that of the United States. Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union—and almost as much as the EU and United States combined.'
According to the report, China's share of global
clean energy investment
has increased from 25 per cent to nearly 33 per cent over the past decade, supported by investment in solar, wind, hydropower, nuclear, battery storage and electric vehicles.
Investment in electricity has overtaken fossil fuel investment. In 2015, fossil fuel investment was 30 per cent higher than that in
electricity generation
, grids and storage. In 2025, electricity investment is expected to be 50 per cent higher.
Spending on low-emissions power generation has nearly doubled in five years, led by solar PV. Investment in solar, both rooftop and utility-scale, is forecast to reach $450 billion this year. Battery storage investment is also expected to rise above $65 billion. Investment in nuclear power has increased 50 per cent over five years and is expected to reach $75 billion.
In contrast, upstream oil investment is expected to fall by 6 per cent year-on-year, driven mainly by a drop in US tight oil spending. Investment in liquefied natural gas (LNG) infrastructure is rising, with new facilities under development in the US, Qatar, Canada and other countries. The global LNG market is projected to witness its largest ever capacity growth between 2026 and 2028.
Despite the rise in generation and electrification, investment in electricity grids—currently at $400 billion per year—is not keeping pace. The report noted that grid investment must reach parity with generation by the early 2030s to maintain electricity security. Factors such as long permitting timelines and constrained supply chains for transformers and cables have impacted grid investment growth.
In 2024, China began construction on nearly 100 gigawatts of new coal-fired power capacity, pushing global approvals to the highest level since 2015. Investment in coal continues, mainly in China and India, driven by rising electricity demand.
The report highlights persistent disparities in global energy investment. Africa, which is home to 20 per cent of the global population, accounts for just 2 per cent of clean energy investment. Total energy investment in Africa has declined by one-third over the past decade due to reduced fossil fuel spending and limited clean energy investment growth.
The IEA called for international public finance to be scaled up to mobilise private capital in emerging and developing economies to address the gap in clean energy investment.