Energy Transition Investment Hits Record $501.3B in 2020

(Credit: BloombergNEF)

by | Jun 2, 2021

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(Credit: BloombergNEF)

Signaling that a low-carbon energy future continues to build momentum, global investment in energy decarbonization hit a record $501.3 billion in 2020, according to BloombergNEF. The analysis includes renewables, storage, electric vehicles and heating, hydrogen, and carbon capture and storage. 

The 2020 high of $501.3 billion was up from $458.6 billion in 2019, a 9% increase, and $235.4 billion in 2010. The largest sector in 2020 was renewable energy, which garnered $303.5 billion for new projects and small-scale systems, up 2% from 2019.

China’s investment in 2020 at $134.8 billion was the largest of any country in the world, followed by the U.S. at $85.3 billion, though both country’s investments were down from the prior year. U.S. renewables capacity investment fell 20% to $49.3 billion, while electric transport outlays edged up 3% to $18 billion.

Most of the overall increase in global investment last year came from European countries. The total for Europe was 67% higher than 2019, at $166.2 billion, and greater than China and the U.S. The main drivers of the increased spending were big offshore wind financings in the U.K. and the Netherlands, and rising electric vehicle sales in many countries.

Looking at renewable energy, there are signs of stability in the flow of dollars. Global investment in renewables capacity (excluding large hydro) was $303.5 billion in 2020, up 2% over 2019, and the seventh successive year of figures in excess of $250 billion. Solar led the way, with investment of $148.6 billion, up 12%, while wind saw a 6% decline to $142.7 billion. Biomass and waste-to-energy capacity attracted $10 billion in capacity investment, down 3% above 2019.

Passenger electric vehicles led the way in transportation investments globally. In 2020, the size of the market increased four times compared to 2016, reaching an estimated $118 billion. Electric bus sales are the second largest category, although annual investment in the segment has decreased from $21 billion in 2016 to $11 billion in 2020, driven by changing market dynamics in China, which accounted for 99% of global electric bus sales from 2016 to 2020.

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