The International Energy Agency (IEA) announced on Thursday that global energy investment is expected to hit a record $3.3 trillion (2.89 trillion euros) in 2025. This surge is driven mainly by increased spending on clean energy, despite ongoing economic uncertainty and geopolitical tensions.
Clean energy technologies—including renewables, nuclear power, and energy storage—are forecast to receive $2.2 trillion in investment. This amount is twice the investment expected for fossil fuels, according to the IEA’s annual World Energy Investment report.
IEA Executive Director Fatih Birol noted, “Some investors are cautious about approving new energy projects due to the changing economic and trade environment. However, existing projects have not yet seen major impacts.”
Solar power will benefit the most, with investments projected to reach $450 billion in 2025. Battery storage spending is also set to rise sharply, reaching around $66 billion. Batteries help manage the irregular supply of renewable energy by storing excess power and releasing it when demand is high. However, investment in battery technology has lagged behind that of solar and wind power.
In contrast, investment in oil and gas is expected to decline. Upstream oil investment is forecast to drop by 6% in 2025, marking the first decrease since the Covid-19 crisis in 2020. This decline is driven by lower oil prices and reduced demand expectations.
The IEA also highlighted a concern about electricity grids. Annual investment in grids stands at $400 billion, which is less than spending on power generation and electrification. This imbalance could threaten electricity security. To maintain reliable power supply, grid investments need to rise to match generation spending by the early 2030s. However, progress is slowed by regulatory hurdles and supply chain issues for key components like transformers and cables.
Investment patterns vary widely across the globe. Many developing countries face challenges in raising funds for energy infrastructure. Meanwhile, China leads global clean energy investment, accounting for nearly one-third of the total.
Related topics:
