Clean energy investment remains far below what is needed to effectively combat global heating, despite early signs that some of the world's largest fossil energy players are accelerating their spending on green projects and technologies, warned the International Energy Agency (IEA).

The world will see $750 billion of investments in clean energy technologies and efficiency this year — but that needs to triple to give a chance of hitting net-zero emissions by 2050, said the IEA.

Future of Floating LNG Digital Event
Five years in, has FLNG lived up to its early promise? And what happens next? Find out at our next digital event.

The Paris-based body said total global energy investments will rebound from coronavirus pandemic-induced falls seen in 2020 to see a 10% increase to $1.9 trillion in 2021.

The power sector will with a record $820 billion for the sixth year in a row outstrip oil and gas investment, the IEA predicted, with renewables dominating spending on new generation capacity, accounting for 70% of the total.

There were signs of an accelerating shift by global oil & gas majors towards clean energy investments, the IEA reported, although fossil spending remains their overwhelming focus.

The body reckons capital spending on clean energy could reach 4% across the global oil and gas sector in 2021, up from 1% in 2020 — with some European groups reaching “well above 10%”.

European giants such as BP, TotalEnergies — which changed named last week from Total —and Shell have led the charge into sectors such as solar and offshore wind, often under pressure from their own shareholders.

But while the numbers are huge and the direction of travel for renewables is encouraging, the IEA in its World Energy Investment 2021 report said there is far further to go to keep the planet in line with ambitions for limit global warming to 1.5 degrees Celsius.

“The rebound in energy investment is a welcome sign, and I’m encouraged to see more of it flowing towards renewables,” said Fatih Birol, IEA executive director.

“But much greater resources have to be mobilised and directed to clean energy technologies to put the world on track to reach net-zero emissions by 2050. Based on our new Net Zero Roadmap, clean energy investment will need to triple by 2030.”

The agency in May hit the headlines when the roadmap for the first time called for an immediate halt to new fossil fuel projects if global targets on curbing temperature rises are to be met.

Coal still around

The IEA — which has previously warned that an upswing in coal will push up global emissions this year — said the dirtiest source of power is by no means a spent force.

Although approvals for coal-fired plants are 80% below five years ago, there was a slight rise in green lights for new ones last year led by China and some other Asian nations.

ENERGY EXPLORED: SUBSCRIBE TO ACCELERATE

Gain valuable insight into the global oil and gas industry's energy transition from ACCELERATE, the free weekly newsletter from Upstream and Recharge. Sign up here today.

Birol said: “Governments need to go beyond making pledges to cut emissions and take concrete steps to accelerate investments in market-ready clean energy solutions and promote innovation in early-stage technologies.

“Clear policy signals from governments would reduce the uncertainties associated with clean energy investments and provide investors with the long-term visibility they need.”

(This article first appeared in Upstream's sister renewable energy publication Recharge on 2 June, 2021.)