$2 trillion surge in global investments for clean energy

A recent International Energy Agency (IEA) report reveals that global governments have allocated nearly US$ 2 trillion in direct investment support for clean energy since 2020. This amount is almost three times the funding committed after the 2007-08 financial crisis. The report highlights that approximately 80% of this government spending has occurred in China, the European Union, and the United States.

The surge in support for clean energy technologies reflects a growing focus on energy security amid recent global crises. Policymakers have ramped up incentives, with domestic manufacturing support emerging as a significant area of public investment. Since the beginning of the decade, domestic manufacturing incentives have constituted around 10% of total government spending, with major funding directed toward low-emission vehicles, hydrogen production, and battery technologies.

At the consumer level, short-term government support peaked at US$ 940 billion during the global energy crisis. Laura Cozzi, IEA Director of Sustainability, Technology and Outlooks, emphasized that the unprecedented policy and investment backing for clean energy not only aims to reduce emissions but also to enhance energy security. She noted that the rise in trade policies and manufacturing incentives indicates that clean energy has become a central component of industrial strategies worldwide.

Overall, the findings underscore the vital role of government investment in transitioning to sustainable energy solutions and highlight the strategic importance of clean energy technologies in current and future economic frameworks.

India’s Contribution to Renewable Energy

India’s renewable energy ministry has secured investment commitments totaling US$ 386 billion from banks and financial institutions to support the country’s decarbonization efforts. These investments aim to help India more than double its clean electricity capacity by 2030, as highlighted by Renewables Minister Pralhad Joshi at the RE-Invest conference in Gandhinagar, earlier this september.

As the world’s third-largest carbon emitter, India has set an ambitious target of achieving 500 gigawatts (GW) of non-fossil fuel capacity by the end of the decade. To realize this goal, the country needs to add approximately 44 GW of renewable energy capacity annually through 2030, a significant increase from the average of the past five years. This strategy is crucial, as the planned capacity would account for over 40% of India’s incremental electricity generation, underscoring the critical role of renewable energy in the nation’s energy future.