Global investment on low-carbon energy transition increased by more than a quarter in 2021, led by the electric vehicle and renewable power industries. According to a recent BloombergNEF analysis, total investment hit $755 billion, a 27 percent increase over the previous year.
The record-breaking statistics demonstrate how strong investor demand is for technology critical to mitigating the worst consequences of global warming, Bloombergquint.com writes.
However, investment must be greatly increased in order to achieve net-zero carbon emissions by the middle of the century. BNEF forecasts that $2.1 trillion in energy transition investment is required between 2022 and 2025, approximately three times last year’s level. Spending on renewable electricity, electrified heat, energy storage, and nuclear power is included in the numbers.
“We need to see considerably more investment across all areas,” said Albert Cheung, BNEF’s director of analysis. “You’re going to have to see a massive upswing, and that’s going to have to be led by government policy.” New renewable energy projects, such as wind farms and solar parks, received the most percentage of funding in 2021. The industry drew $366 billion, a 6.5 percent increase over the previous year, with the majority of it centered in Asia.
Renewables investment in the Americas, Europe, the Middle East, and Africa remained flat in comparison to 2020. Renewable energy capacity will need to expand quickly in order to produce enough clean energy to not just replace fossil fuels from the world’s electric networks, but also to sustain new sources of demand from electric cars.
In 2021, investment in electric transportation, including cars and supporting infrastructure, will increase by 77% to $273 billion. This year, BNEF anticipates that number will exceed the amount spent on renewable energy.