The world committed a record $501.3 billion to decarbonization in 2020, beating the previous year by 9% despite the economic disruption caused by the covid-19 pandemic, according to BloombergNEF’s (BNEF) new Energy Transition Investment Trends report.
Global investment in renewable energy capacity moved up 2% to $303.5 billion in 2020, BloombergNEF reports, the second-highest annual figure ever (after 2017’s $313.3 billion), and the seventh consecutive total of more than $250 billion.
The largest sector in 2020 was renewable energy, which attracted
$303.5 billion for new projects and small-scale systems. This was
up 2% on 2019, despite covid-related delays to some deals, BloombergNEF reports.
The second-biggest was electric transport, which saw $139 billion
of outlays on new vehicles and charging infrastructure, up 28%.
Electric heat got $50.8 billion of investment, up 12%.
Hydrogen and CCS are small sectors for now, but are expected to
grow, the report reads. In 2020, they received investment of $1.5 billion and $3 billion, respectively down 20% and up 212%.
“Our figures show that the world has reached half a trillion dollars a year in its investment to decarbonize the energy system. Clean power generation and electric transport are seeing heavy inflows, but need to see further increases in spending as costs fall, says Albert Cheung, head of analysis at Bloomberg NEF.
“Technologies such as electric heat, CCS and hydrogen are only attracting a fraction of the investment they will need in the 2020s to help bring emissions under control. We need to be talking about trillions per year if we are to meet climate goals,” Cheung says.
A geographical split of BNEF’s energy transition investment data shows that Europe accounted for the biggest slice of global investment, at $166.2 billion (up 67%), with China at $134.8 billion (down 12%) and the U.S. at $85.3 billion (down 11%). Europe’s impressive performance was driven by a record year for electric vehicle sales, and the best year in renewable energy investment since 2012.
Meanwhile, Europe and China are still vying for top position among
markets active in energy transition investment.
(Read the full report here)