Jun 5, 2025
Global energy investment is projected to reach a record $3.3 trillion by 2025.
The International Energy Agency (IEA) announced that a rise in clean energy spending is anticipated to lead to a record $3.3 trillion in global energy investment by 2025, despite economic and geopolitical uncertainties. Investments in clean energy technologies, such as renewables, nuclear, and energy storage, are projected to reach $2.2 trillion, double the expected amount for fossil fuels, according to the IEA's annual World Energy Investment report.
IEA Executive Director Fatih Birol noted that while the changing economic and trade landscape has caused some investors to hesitate on new energy project approvals, there haven't been significant effects on existing projects yet.
Solar energy is expected to receive the largest share, with investments estimated at $450 billion in 2025, while spending on battery storage is projected to rise to about $66 billion. Batteries help address the variability of renewable energy by storing excess power during high supply times and releasing it when demand peaks, though investments in this technology have not kept pace with those for solar and wind.
Conversely, oil and gas investments are anticipated to decline, with upstream oil investments predicted to drop by 6% in 2025 due to shrinking oil prices and demand, marking the first decrease since the Covid crisis in 2020.
The IEA also cautioned that the $400 billion annual investment in grids is insufficient compared to spending on generation and electrification, posing risks to electricity security. Investment in grids must rise to be nearly equal to generation spending by the early 2030s to ensure electricity security, but this is hindered by regulatory challenges and supply chain issues for transformers and cables.
Investment patterns are highly uneven globally, with many developing countries facing difficulties in securing capital for energy infrastructure, while China leads global clean energy investment, accounting for nearly one-third of the total.
IEA Executive Director Fatih Birol noted that while the changing economic and trade landscape has caused some investors to hesitate on new energy project approvals, there haven't been significant effects on existing projects yet.
Solar energy is expected to receive the largest share, with investments estimated at $450 billion in 2025, while spending on battery storage is projected to rise to about $66 billion. Batteries help address the variability of renewable energy by storing excess power during high supply times and releasing it when demand peaks, though investments in this technology have not kept pace with those for solar and wind.
Conversely, oil and gas investments are anticipated to decline, with upstream oil investments predicted to drop by 6% in 2025 due to shrinking oil prices and demand, marking the first decrease since the Covid crisis in 2020.
The IEA also cautioned that the $400 billion annual investment in grids is insufficient compared to spending on generation and electrification, posing risks to electricity security. Investment in grids must rise to be nearly equal to generation spending by the early 2030s to ensure electricity security, but this is hindered by regulatory challenges and supply chain issues for transformers and cables.
Investment patterns are highly uneven globally, with many developing countries facing difficulties in securing capital for energy infrastructure, while China leads global clean energy investment, accounting for nearly one-third of the total.