As the world’s poorer nations struggle to pay rising energy prices, global clean energy spending is on track to surge some 12% in 2022, according to POLITICO Pro’s CLIMATEWIRE (subscription). Yet obstacles remain on the way toward green milestones.
What’s going on: “Renewables, transmission networks and energy storage account for 80 percent of global power-sector investment, which outstrips total spending on oil and gas production and coal mining.”
- “The world now sells as many electric vehicles in a week as it did in a year a decade ago. Even technologies such as green hydrogen and carbon capture have started to gain momentum, [a recent International Energy Agency report] found.”
But … approximately half the rise in spending is owed to higher prices, not investments in new clean energy capacity, according to CLIMATEWIRE.
- “Those price increases have been driven in large part by bottled-up supply chains, which have been unable to keep up with surging demand for the critical minerals used in solar panels, wind turbines and electric vehicles.”
The bigger picture: Approximately 90 million people in Africa and Asia are now unable to pay for their energy needs, according to IEA estimates.
- The IEA’s report comes at a time of turbulence for the energy sector, which began the year with demand far outpacing supply.
Continued reliance: 2021 saw a 10% rebound in coal investments, which are expected to grow an additional 10% in 2022.
- “The growth in coal is primarily driven by China and India, though Europe is also turning to the black rock as a substitute for gas.”
Hurdles remain: As electric-vehicle sales increase, so does the demand for EV-battery minerals.
- “IEA estimates that the share of cathode material costs in an EV battery, which include lithium, nickel and cobalt, has risen from 5 percent of a battery’s cost in the mid-2010s to 20 percent today. In the case of wind and solar, rising mineral costs threaten to reverse decades of falling costs.”