Recent developments in green energy have marked a significant milestone as reported by the UK-based Ember research center last Friday. Fossil fuel consumption for energy production in the European Union dropped to just 23% in April, reaching a historic low. Sarah Brown, director of Ember, emphasised the unprecedented shift in the European energy landscape, describing the reduction in fossil fuel use as something previously unimaginable.
The rapid advance towards green energy, especially notable against the backdrop of current and past global crises, has led analysts to declare 2023 a pivotal year in changing the energy consumption landscape. Dave Jones, another leader at Ember, echoed this sentiment, and I find myself in agreement with his assessment.
Supporting this transition, BloombergNEF’s report highlighted a 17% increase in global investments in green energy in 2023, amounting to a record $1.77 trillion. These investments demonstrate the resilience of the transition towards clean energy amidst geopolitical turbulence, high interest rates, and inflation.
According to BloombergNEF China is currently leading the charge towards a green economy with investments totaling $676 billion in 2023, representing 38% of the global total. However, when combined, investments from the EU, USA, and UK surpass this, reaching $737 billion. This underscores a growing commitment among the world’s major economies to foster the development of green energy.
The shift towards sustainable energy sources requires significant capital investments and time. Despite encouraging current investment levels, they still fall short of meeting the requirements needed to achieve global mid-century climate goals. According to the International Monetary Fund, reaching net-zero emissions by 2030 would require around $5 trillion annually—almost triple the current investment levels. This highlights the need for substantial financial expenditures to upgrade existing energy infrastructure.
Expanding investments and implementing large-scale projects in green energy require coordinated efforts from both governments and the business sector. Innovative policy measures and pioneering financial instruments are necessary to attract funding, reduce financial risks, and create an appealing environment for investors looking to commit to the sustainable development of green energy.
At a recent celebration of the 50th anniversary of the International Energy Agency in Paris, Ursula von der Leyen, President of the European Commission, also emphasised the need for “massive investments” in renewable energy sources and related technologies. She stated that the activation of private business is crucial for the green transition.
Grigory Burenkov
The green energy transition is no longer up for debate. It is a vital necessity and therefore irreversible. The question now revolves around the timing and scale of necessary investments. Despite the challenges that lie ahead, experience has shown that these obstacles are surmountable.
The sector is rapidly integrating the latest technological research and innovations. Significant breakthroughs in green energy are expected soon, particularly in areas related to energy generation and storage, potentially rivaling the impact of artificial intelligence.
Energy technologies are advancing quickly and becoming increasingly cost-effective. For example, the prices of solar panels and lithium-ion batteries have significantly dropped compared to just two years ago, enhancing the competitiveness of renewable resources over traditional fuels. This reduction in cost, coupled with a rise in consumer demand, suggests that by 2026, electric vehicles could account for one-third of total vehicle sales.
The prospects for green investments are becoming increasingly clear. Renewable energy sources such as wind and solar promise to significantly reduce operational costs in the long term, which will become less dependent on commodity price fluctuations. Additionally, the operational efficiency of these technologies continues to improve, further reducing costs.
Companies that transition to green technologies save money and enhance their reputation by meeting global regulatory requirements aimed at reducing carbon dioxide emissions. Global government incentives further increase the attractiveness of investments in green energy for those just starting out.
Continuing to invest in green technologies, it is important to consider this process not only through the lens of current costs and long-term economic viability but as a crucial step toward a sustainable future that preserves our planet for future generations. For our children.
Grigory Burenkov is a Cypriot businessman, international investor, owner of Wheelerson Management Ltd and Osome Group
