Page 4 - AsiaElec Week 25 2022

AsiaElec COMMENTARY AsiaElec

Coal investment remains major

threat to green dream

COMMENTARY An estimated 8% rise in global energy invest- had shot up by 12% per year since 2020, com-
ment in 2022 to $2.4 trillion, driven overwhelm- pared to an average of 2% per year in the previ-
ingly by a 12% rise in clean energy spending, is ous five years.
still far from enough to tackle the energy crisis Spending has been underpinned by fiscal
and to put the world on the path to a greener and support from governments and aided by the rise
more secure energy future. of sustainable finance, especially in advanced
The power generation sector posted the fastest economies.
growth in energy investment, centres on renewa- Renewables, grids and storage now account
bles and grids, followed by energy efficiency, the for more than 80% of total power sector invest-
International Energy Agency (IEA) said in its ment. Spending on solar PV, batteries and elec-
recent World Energy Investment report. tric vehicles is now growing at rates consistent
Yet the current threats to energy security, such with reaching global net zero emissions by 2050.
as the fallout from Russia’s invasion of Ukraine Indeed, there is rapid growth from a low base
and high prices, are pushing some governments in many emerging technologies, notably batter-
and companies to maintain and even increase ies, low emissions hydrogen, and carbon capture
investment in fossil fuels, notably coal. Invest- utilisation and storage. These are areas that the
ment in coal rose by 10% in 2021 and id esti- IEA has previously identified as key to driving
mated to rise by another 10% in 2022. green energy expansion in the coming decades.
Meanwhile, green investment remains con- Investment in battery energy storage is
centrated in the developing economies and expected to more than double to reach almost
China. $20 bn in 2022
Put simply, far from enough is being done to
keep the world on course to limit global warm- Unwelcome news
ing to 1.5C, as called for at COP26. The current However, behind the rising investment there are
heatwaves, which first hit Asia in April and are some details that are less welcome. The report
now pushing summer temperatures in the US said almost half of the overall increase in spend-
and Europe to record levels, are highlighting the ing was a reflection of higher costs, from labour
dangers of man-made global warming, from the and services to materials such as cement, steel
food supply crisis to billions of people potentially and critical minerals.
migrating to escape uninhabitable regions. These challenges are deterring some energy
The IEA is adamant that the world has both companies from picking up their spending more
the tools and the finances to tackle both the quickly.
global energy crisis – in terms of both price and What this means is that higher investment is
supply – and the climate crisis at the same time. not equating to more green energy, but in fact
“We cannot afford to ignore either today’s could be preventing many green projects form
global energy crisis or the climate crisis, but being built.
the good news is that we do not need to choose Also clean energy spending in emerging
between them – we can tackle both at the same and developing economies (excluding China)
time,” said IEA Executive Director Fatih Birol. remains stuck at 2015 levels, with no increase
“A massive surge in investment to accelerate since the Paris Agreement was reached. Excep-
clean energy transitions is the only lasting solu- tions to this trend include the expansion of solar
tion. This kind of investment is rising, but we in India.
need a much faster increase to ease the pressure The report highlighted that public funds to
on consumers from high fossil fuel prices, make support a sustainable recovery are scarce in
our energy systems more secure, and get the developing countries in Africa and Asia, where
world on track to reach our climate goals.” policy frameworks are often weak, economic
clouds are gathering and borrowing costs are
Spending rising.
The report stressed how clean energy investment All of this undercuts the economic

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