If the 20th century was the century of oil, 2023 will mark a historic turning point on the calendar. It will officially pass to the era of the sun. At least as far as investments are concerned. This was certified yesterday by the International Energy Agency (IEA) in its report World Energy Investment 2023 .
This body estimates that investment in solar energy will exceed for the first time in 2023 the money allocated to oil production. The study does not give concrete figures for this surprised , but aggregate data. Thus, global investment in clean energy (ie low CO2 emissions) will increase this year to exceed 1.59 trillion euros.
This includes renewables, electric cars, grids and storage, low-emission fuels, efficiency improvements, heat pumps or nuclear power. Between 2021 and 2023, its growth will be 24%.
Of energy spending, for every dollar that goes to fossil fuels, some 1.7 go to renewables
On the other front, some 930,000 million euros will go to coal, gas and oil. Its increase, in the last three years, will have been 15%. Therefore: not only is more invested in energy green than in fossils, but also their growth rate is higher. “Clean energy is moving fast, faster than many people realize,” said IEA director Fatih Birol. “Investors are betting on this sector because they do good business and not just to save the planet,” he added.
There is a data that is indicative. For every dollar invested in fossil fuels, currently 1.7 go to clean energy. Five years ago, this ratio was one to one.
The fact that investment in solar energy exceeds that received by the oil sector, apart from its symbolic value, has a temporary explanation. Today, solar energy is the gateway to a much greater electrification that will take place in the coming years, when the use of electricity to recharge cars or heat homes will expand.
“In turn, consumers are increasingly investing in electrified goods. Heat pumps have been growing at double digits since 2021. Sales of electric cars will increase by a third this year, after resurfacing last year”, they state in the study.
“If it is true that in the last decade the cost of the panels had fallen by up to 80%, now the prices have stabilized, but in proportion they are capable of offering more power”, comments Esther Morlanes, general director of Alterna Energía, a company specialized in self-consumption for companies.
“Large companies install solar panels for a matter of sustainability and social responsibility, in addition to achieving savings and security in supplies,” says Morlanes. The payback period for the boards is typically six to seven years. “Solar energy has another advantage over oil: it is produced close to where it is consumed. There are no losses or transportation costs. And, in the future, investments in energy storage will open a new potential for this industry”, she assures.
Too many emissions still
Expenditures on oil and gas will grow by 7% in 2023, until returning to 2019 levels, the IEA says in its report. The few oil companies that are investing more than before the covid pandemic are mostly big national oil companies in the Middle East, such as Aramco. Many fossil fuel producers made record profits last year thanks to rising fuel prices, but most of this cash flow has gone to dividends, share buybacks and debt repayments. As for emissions, despite the boom in renewables, there is no good news. If global investment in fossil fuels this year is to grow to 930 billion euros, this is double what would be necessary to meet the goal of carbon neutrality by 2050. In addition, the volume of money absorbed by the coal sector will continue to increase this year to 139,000 million. If it continues along these lines, in 2030 this investment will be six times higher than what would be desirable to limit global warming to 1.5ºC.
However, it is important to highlight the overwhelming leadership of China. Many European companies still find it more profitable to buy the material in that country than to manufacture it in Europe. Of the top ten manufacturers of solar panels with the largest capacity, eight are Chinese. The country’s share in world production is greater than 80%, which can reach more than 95% in some components. A worrisome dependency.
In this sense, the director Fatih Birol warned in an interview that “Beijing is the dominant actor. Thinking that Europe will be able to replace China or take away a large part of the market is not the correct strategy. It is better for the EU to bet on technologies such as wind power offshore hydrogen or heat pumps”.