According to an IEA report, the total investment on the global power section this 2021 is set to increase to 5% or more than $820 Billion USD. 70% of that investment or $530 Billion, accounts for new power generation from renewable energy sources. The other 30% goes to investment in power storage and grids. This large spending in renewable energy is mostly due to the decreasing cost in power generation coming from wind and solar. Due to rapid technological improvements, for example in solar photovoltaic (PV), power generation from renewables has become way cheaper that it was a decade ago.
Global energy investment, 2017-2021
Source: IEA World Energy Investment 2021
This doesn’t come as a surprise as Renewable Energy has been breaking previously set records even through the pandemic. Growth rate has consistently increased in the last few years with 280 gigawatts (GW) additional capacity just in 2020 (45% increase) and additional 270GW capacity set to be operational this 2021 and 280 GW in 2022.
Average Annual Net Renewable Capacity Additions, 2011-2022
Source: IEA Renewable Energy Market Update 2021
According to the IEA report, Energy investment and demand is set to rebound in 2021. The total investment for energy in 2021 is set to increase to USD 1.9 Trillion. This is a 10% increase from 2020 pushing the total investments in energy back to pre pandemic levels. Global energy demand is also set to increase to 4.6% in 2021 according to IEA estimates. This offsets the 4% contraction in 2020.