Energy Security Concerns will Boost Coal Investment by 10 Per Cent

The latest version of the International Energy Agency’s World Energy Investment report said clean energy investment is set to exceed USD 1.4 trillion this year and account for almost three-quarters of the growth in overall energy investment.

FREMONT, CA: The International Energy Agency predicts that global energy investment would increase by more than eight per cent in 2022 to reach USD 2.4 trillion, including a considerable increase in coal supply chains. However, much more money will be needed to achieve climate-related goals.

It is expected that clean energy investments will exceed USD 1.4 trillion this year and will account for nearly three-quarters of the growth in global energy investment. However, the agency stressed that there is still a lot of work to be done. In the five years following the signing of the Paris Agreement in 2015, the yearly average growth rate in renewable energy investment was slightly over 2 per cent. That rate had increased to 12 per cent since 2020. That was seen by the IEA to be an important step in the right direction, but well short of what is required to fulfil international climate goals. The IEA's Fatih Birol spoke about the potential and difficulties facing the planet right now.

Regardless of the fact that the investment was appreciated, a statement that accompanied the IEA report pointed out that the growth in clean energy spending is unevenly distributed, with advanced economies and China making up the majority of the spending. In addition, it noted that high costs were being experienced in some markets and that concerns about energy security were driving increased investment in coal supply. The coal supply chain saw almost USD 105 billion invested in 2021, according to the IEA estimate. When compared to 2020, that represented an increase of ten per cent. The industry is predicted to proceed similarly this year. As new projects continue to be drawn in by the limited supply, global investments in coal supply are predicted to increase by another ten per cent in 2022. China and India are expected to account for the majority of global coal investment in 2022, with a combined total of nearly USD 80 billion.

The U.S. Energy Information Administration provides a comprehensive list of emissions produced by coal combustion. These include nitrogen oxides, carbon dioxide, sulphur dioxide, and particulates. For its part, Greenpeace has called coal the dirtiest, most polluting method of creating energy.

In addition to rising inflation, increasing oil and gas prices, and geopolitical tensions related to the conflict in Ukraine, the IEA report is being released at a time when inflation is rising. Consumers, governments, and companies have faced a very difficult environment as a result of these elements. The energy industry is not an exception. The IEA stated that higher expenses are more likely to consume nearly half of the additional USD 200 billion in capital investments made in 2022 than they are to result in increased energy supply capacity or cost reductions. As a result of a fall in prices, the cost of solar panels and wind turbines, two technologies crucial to the energy revolution, have increased 10 to 20 per cent since 2020. People all across the world are also feeling the pinch as the overall consumer energy cost is predicted to surpass USD ten trillion for the first time in 2022.