Investment in clean technologies will total around $2trn in 2024
Investment in clean technologies will total around $2trn in 2024

Investment builds in CCUS and hydrogen

Around 20 commercial-scale carbon capture, utilisation and storage (CCUS) projects in seven countries reached FID in 2023 and more than 110 could be firmed up financially this year, according to the latest IEA World Energy Investment 2024 report.

If all projects are delivered on time, there will be a near 10-fold increase in CCUS investment by 2025, to $26bn – spurred by government funding and oil and gas company investment – but it remains ‘an open question’ whether all these projects will materialise, the report states.

The IEA’s positive outlook also extends to hydrogen, where electrolyser investment is expected to jump by more than 140% to $5bn this year, mainly as a result of capacity additions and inflation, with rises in equipment prices and financing costs.

Most capacity coming online is replacing existing uses (refining and chemicals), which are generally perceived as lower risk than new demand sources such as mobility and fuel conversions. China, Europe and the US are set to spearhead the investment charge although large-scale projects are underway in Saudi Arabia, Oman and Australia.

Total energy investment worldwide is expected to exceed $3trn in 2024 for the first time, with $2trn set to go toward clean technologies.

Fatih Birol, IEA Executive Director, said clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy.

“For every dollar going to fossil fuels today, almost two dollars are invested in clean energy,” he said.

“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains.”

“More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”

The global LNG trade expanded by 2%, or 12 bcm, in 2023, the lowest growth rate since 2014, although it was one of the few sectors to see consistent growth through the pandemic and subsequent geopolitical headwinds.

However, as has been widely reported by gasworld, the LNG markets look ‘amply supplied’ in the second half of the decade. Of the new capacity coming online, 70 bcm will be delivered to fixed destination terminals and 100 bcm contracted to portfolio players – leaving around 80 bcm that does not yet have firm offtakers.

“If future demand for LNG does not materialise, or if regional price benchmarks fall to low levels, the sellers of these uncontracted volumes would be the most exposed,” it states.

Investment in refining held steady last year, at around $37bn, but is set to fall this year with around 0.8 mb/d of new capacity coming online.

About the author
Related Posts
No comments yet
Get involved
You are posting as , please view our terms and conditions before submitting your comment.
Loading feed...
Please wait...