The International Energy Agency (IEA) has published its newest World Energy Investment report, estimating capital flows into the energy sector to total $3.3 trillion this year, out of which renewables would account for $2.2 trillion, and fossil fuels for $1.1 trillion.
The agency argues that rapid growth in spending on energy transition over the past five years was kicked off by post-pandemic recovery packages and then sustained by a variety of economic, technology, industrial and energy security considerations, not just by climate policies. At the same time, some 70% of the increased spending came from net fossil fuel importers such as China and Europe.
“Emissions reductions provide a powerful reason to invest, but are often not the primary driver for investment in technologies that are increasingly mature and cost-competitive,” IEA said.
Energy investment is on the rise as electricity demand in industry, cooling, electric mobility, data centres and artificial intelligence increase. The electricity sector is set to attract $1.5 trillion of investment this year, some 50% higher than the total amount being spent on bringing oil, natural gas and coal to market.
Spending on low-emissions power generation has almost doubled over the past five years, led by solar at $450 billion in 2025. Global spending on batteries for power sector storage is set to reach $66 billion this year.
Lastly, according to IEA, growth in critical minerals investment slowed in 2024 amid lower prices, and exploration activity was flat year-on-year. Projects outside the main incumbent producers were most affected by the price uncertainty.
Theodor Lisovoy, Managing Editor, Rough&Polished
