Clean energy investment trends 2024 look promising. In 2023, global investments in the clean energy transition totaled 755 billion dollars. This was a new record. Rising climate ambition and policy action from countries worldwide played a significant role in the increase in clean energy investments.
Investments rose in energy storage, renewable energy, electrified heat, electrified transport, hydrogen, nuclear, and sustainable materials. Only the carbon capture and storage sector recorded a dip in investments.
Renewable energy remains the largest sector in terms of investments. It recorded assets worth 366 billion dollars in 2021. This was 6.5% more than the previous year. The second-largest industry was electrified transport, with investments worth 273 billion dollars. Experts predict that electric vehicle investments could overtake renewable energy in 2024.
Investments in energy storage, renewables, nuclear, electrified transport, electrified heat, and clean power stood at 731 billion dollars. Hydrogen and carbon capture and storage achieved investments of 24 billion dollars.
To be on track to achieving net-zero emissions by 2050, global investments in clean energy technologies must average 2,063 billion dollars between 2022 and 2025. This figure needs to double to 4,189 billion dollars over the years 2026-2030.
As concern for climate change grows and investors show interest in environmental, social, and governance (ESG) considerations, the renewable energy industry will grow in 2024. So here are the top clean energy investment trends in 2024 to watch out for.
Clean Energy Investment Trends to Watch Out For
1. New technologies
There is a growing interest among investors in next-generation clean energy technologies. Renewable energy stakeholders are considering investing in them. Investing in clean technology will help integrate variables like wind and solar power into the electric grid. The renewable energy industry has primarily been focused on wind and solar power. But, private investments, pilot projects, and federal research support could help promote the commercialization of new emerging technologies such as advanced batteries, long-duration storage, and green hydrogen. These new technologies can ease power grid congestion, provide zero-carbon electricity, boost reliability, and help integrate solar and wind energy into the power grid.
The primary driver of the increase in green hydrogen technology is the falling cost of renewable energy. As renewable energy input in the power grid increases this year, industry experts also expect green hydrogen to grow. Green hydrogen has become popular mainly due to its potential for long-duration storage of fuel and its easy availability on demand for power. Energy companies and governments have ramped up renewable hydrogen production in response to this.
2. New business models
Today, solar photovoltaic (PV) systems are among the most cost-competitive energy resources in the world. Over the past decade, their cost has declined by 85%. The solar industry is likely to boost attempts at exploring new configurations and business models. This year, 2022, could witness the renewable energy industry develop solar-plus-storage buildouts, expand community solar projects to new markets, and explore floating solar PV modules. Solar energy coupled with storage options offers operational efficiencies and the opportunity to reduce capital costs associated with storage.
3. Infrastructure development
The beginning of 2022 saw transmission infrastructure become a key priority for energy industries, especially offshore wind farms. Transmission infrastructure is vital for connecting renewable energy farms remotely to electricity-consuming centers. Industry experts say that transmission development will remain a crucial part of renewable energy’s agenda for the rest of 2022. Transmission projects have so far remained a challenge for the industry because of the difficulty in obtaining approval from the regions the transmission networks will cross. The sector also sometimes faces permission refusal from landowners and opposition from environmental organizations during the construction of their transmission projects.
Around 90% of renewable energy remains stuck in storage in transmission interconnection queues. This is especially true for offshore wind energy projects that we must connect to coastal infrastructure to consume its power. Building new power lines and enhancing existing ones is vital to solving the transmission challenge. This year, 76% of power industry owners and utilities are planning, constructing, or depending on new transmission projects to provide everyone with access to renewable energy.
4. Supply chain ecosystem
Supply chains in the renewable energy industry are likely to evolve. In 2021, solar prices increased for the first time in seven years due to shortages in the supply of components, raw materials, and labor. The solar industry also remained under pressure due to rising shipping costs. In 2022, developers will likely seek alternative suppliers and domestic manufacturers. They will reassess their supply needs and seek substitutes to ensure that they can bounce back from future such events.
Most solar installers and developers are likely to boost their compliance monitoring activity this year. This would result from them attempting to adhere to the Solar Energy Industries Association’s Solar Supply Chain Traceability Protocol – a set of guidelines that help trace the origin of raw solar material. The international organization mainly set up guidelines to ensure that the procurement of solar material is free of unethical labor practices.
5. Sustainable growth
A circular economy is essential for sustainable growth in the renewable energy industry. Manufacturers will pay special attention to end-of-life (EoL) strategies this year. EoL strategies help them reduce waste and increase resource security. The strategies also help provide financial value and sustainability credentials to the industry. As the solar, wind, and battery-storage sectors grow, so will their waste.
Therefore, policymakers and industry stakeholders have begun exploring ways to extend life and performance and promote the recovery and reuse of products. The current demand for batteries in various applications will result in collaboration among industries and businesses to develop a circular economy. They could create a secondary market for repurposed electric vehicle batteries. However, regulations on reusing and recycling batteries are in the initial development phase. The sector needs strong incentives from the government to attract private investments.
Owing to a focus on clean energy by both governments and industries, the clean energy sector has witnessed rapid technological advancement over the past two years. Innovations in design, storage capacity, the development of new green fuels, and the integration of solar and wind energy in the power grid are a big part of the clean energy investment trends 2024.
Energy storage has long posed a challenge to the renewable energy industry. Therefore, in 2024, the policies of many countries will have definitive outlines and guidelines for energy storage technology.
The tension between providing reliable and affordable power supply and decarbonizing power grids will lead many governments and businesses to expand their range and invest in upcoming clean energy technologies. In 2024, battery energy storage systems, offshore wind farms, carbon capture and storage, low-carbon hydrogen, and nuclear energy will receive more attention than they did in previous years.
As renewables continue to grow, transmission networks will see a rise in challenges. Governments, businesses, and environmental groups must come together to overcome the energy transmission challenge. This will ensure that everyone has access to clean and affordable energy.