Global investments in energy transition increased by 9%, reaching over $500 billion in 2020. Although investments in Renewable energy grew by 2% from 2019 levels, the surge stemmed from investments that will enable Electric vehicles to be used in the near future. A record year for EV investments with an 28% surge, as BNEF points out in its Energy Transition Investments Report.
Renewable investments continue to be made in the infinite natural resources of solar irradiation and wind. Investments in Biomass have decreased, showing a better alignment with the Paris Agreement goals and the need to invest in assets that limit global warming to 1.5ºC by 2030.
On the corporate sector, organisations have been also actively taking part in the energy transition, as illustrated in the graphic below, collected by Statista from BNEF data. As it can be observed, signing Paris Agreement has been key in this transition. In 2017 corporate PPA investments surged by 44%, in 2018 by 119% and 2019 by 43%. Geographically, the USA has been leading on corporate PPA’s investments.
Despite all clean energy investments made so far, more are still needed to ensure demand is met by cleaner sources. In 2020, OECD still generated 54.7% of electricity from fossil fuels, data from IEA shows. Renewable generation only grew by 4%. Only OECD data is revealed as at the moment, data from the rest of the world isn’t available.
Economic activity can take its normal course uninterruptedly, if the energy network that sustains it is reliable. Currently, reliability to ensure that security of supply is still an issue, as neither sun nor wind are continuously available or when consumers mostly need it. For example, electricity storage investments in 2020 remained unchanged from 2019, as per BNEF’s report. If there’s capacity to produce but no capacity to store when its cost is lower, an opportunity may be wasted.
To reduce that waste and help balancing the electricity system, options are available. At industrial level, demand response is widely available and G2V-V2G is emerging along with renewable energy installations for self-consumption, as the above graphic shows. On the domestic side, consumers are increasingly installing energy-efficient appliances. BNEF indicates a 12% increase in 2020. Prosumers are also on the rise. But to optimise energy assets, either big or small, professionals will be needed.
One thought on “Energy Transition investments”