Global investment in clean energy production in 2023 will be significantly larger than investment in fossil fuel-based energy generation, and for the first time, more money will be invested in solar energy than in the oil sector, according to a report issued by the International Energy Agency on Thursday.

The report, World Energy Investment 2023, finds that globally, $2.8 trillion will be invested in energy in 2023, including production, transmission and storage. Of that amount, $1.7 trillion will be invested in clean technology, which the IEA defines as 'renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps.'

The estimate for clean energy for 2023 reflects a 24% increase over that for 2021 in a sector expected to continue growing for the foreseeable future, as governments worldwide attempt to meet the internationally agreed-on target of net-zero carbon emissions by 2050. Achieving that goal would allow the world to avoid some of the worst effects of global warming.

China leads the world with its increase in annual clean energy spending from 2019 to 2023.

'Moving fast'

While the report shows that the road to a zero-carbon future is long, it also offers the possibility that key interim goals, including total investment targets for 2030, remain achievable.

'Clean energy is moving fast - faster than many people realize,' IEA Executive Director Fatih Birol said in a statement accompanying the report. 'This is clear in the investment trends, where clean technologies are pulling away from fossil fuels. For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was 1-to-1. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.'

The report estimates that in 2023, total global investment in solar power technology will be $382 billion, compared with $371 billion invested in oil production. In 2013, the amount invested in oil production was $636 billion, five times larger than the $127 billion invested in solar.

No pandemic slowdown

Nat Bullard, an energy analyst and a senior contributor to BloombergNEF, which provides strategic research on the transition to a low-carbon economy, told VOA that the IEA report was clarifying after a period of complexity in the energy markets.

'We have had, in succession and overlapping, a pandemic, a supply chain crunch, inflation and a very, very large war all going on at once,' he said. 'They've made long-term trends hard to see because you've had a lot of near-term variability.

'What the report highlights, and the IEA has generally been very clear, is that if you look on an evidence basis, during COVID we did not actually see any deceleration in interest in energy transition,' he said. 'In the years after that, supply chain disruptions, high prices for hydrocarbons and big conflicts have actually encouraged investment.'

Not evenly distributed

China is far and away the largest single investor in clean energy, plunging $184 billion into the selector in 2022. Taken as a whole, the European Union invested $154 billion in clean energy in 2022.

The U.S. trailed both, with $97 billion invested last year. However, the amount spent by the U.S. in 2023 will likely be significantly larger thanks to passage of legislation last year containing funding for clean energy generation.

FILE - This photo taken on March 12, 2021 shows a worker with car batteries at a factory for Xinwangda Electric Vehicle Battery Co. Ltd, which makes lithium batteries for electric cars and other uses, in Nanjing in China's eastern Jiangsu province.

Rounding out the top five, Japan invested $28 billion in clean energy; India, $19 billion.

While rising investment in renewable power is good news in the climate-change fight, the IEA points out that it is heavily tilted toward large developed economies, with poorer countries and the Global South, in particular, seeing relatively little investment.

The entire continent of Africa, for example, saw just $10 billion in clean energy investment in 2022.

Electric vehicles and batteries

Two of the fastest-growing segments of the clean energy investment space are electric vehicles (EVs) and batteries that store power generated by clean energy technologies.

FILE - An electric vehicle is plugged into a charger in Los Angeles, Aug. 25, 2022.

In 2023, the IEA estimates that $129 billion will be invested in electric vehicle technology, more than nine times the $14 billion invested just five years earlier. Battery storage will be the target of $37 billion in investment this year, over seven times the $5 billion invested in the sector in 2018.

In both segments, China is leading the way. In 2022, the entire world's production capacity for lithium-ion batteries, the type most commonly used in EVs, stood at 1.57 terawatt hours. China accounted for 76% of that capacity. By 2030, according to the IEA, that capacity will have ballooned to 6.79 TWh, but China's dominance will continue, accounting for 68% of the total.

Fossil fuels still growing

While renewables may be attracting more investment dollars than fossil fuels in 2023, the IEA reported that consumption of fossil fuels will continue to rise this year.

Meeting the net-zero goal in 2050 requires a slowing of investment in fossil fuels technology, according to the IEA. According to the report, more than $1 trillion will be invested in fossil fuels in 2023. To meet the agency's benchmark for progress, that figure would have to be reduced by more than half by 2030.

Conversely, to remain on track, investment in clean energy must continue to grow. The agency estimates that to meet the benchmark for 2030, annual investment will have to grow from $1.7 trillion this year to $4.6 trillion in 2030.

To reach that goal, clean energy spending would have to grow by about 15% every year between now and 2030, somewhat higher than the 11.4% annual growth the sector has experienced over the past three years.