Introduction
Clean energy is revolutionizing the global energy landscape, with investments reaching historic levels. By 2024, global investment in the energy sector is expected to exceed $3 trillion, with more than $2 trillion earmarked exclusively for clean energy technologies and infrastructure. This shift reflects not only a global effort to reduce carbon emissions but also a response to growing demands for renewable energy and energy security. As the world moves towards a more sustainable future, investment in solar photovoltaics, nuclear power, and energy efficiency plays a crucial role in energy transitions.
Accelerating investments in clean energy
Investment in renewable energies: A structural change
Since 2020, investment in renewables has outpaced spending on fossil fuels such as oil, gas, and coal. This shift is a clear sign that economies are adopting cleaner technologies to meet growing energy demand. Investments in solar PV are a key example of this shift, with more than $500 billion projected by 2024. In addition, investments in power grids and energy storage are also receiving increasing attention due to the need to integrate these intermittent sources of renewable energy into electricity systems.
Photovoltaic solar energy: Leading the transformation
The rise of this energy is a fundamental pillar in energy transitions. In recent years, solar panel costs have fallen significantly, dropping by 30% in just two years. This drop in prices has enabled greater adoption of solar energy in advanced and emerging economies. By 2024, investment in solar PV is expected to exceed all other sources of power generation combined, underscoring its importance in the global energy landscape.
Nuclear energy: A long-awaited resurgence
Nuclear energy is experiencing a renaissance in the context of energy transitions. After several years of decline, investments in this energy have recovered, reaching $80 billion in 2024. This figure represents almost double the investments made in 2018, underscoring the role that nuclear power can play in reducing carbon emissions and ensuring a stable energy supply.
Figure 1, shows a view of the cooling towers of a nuclear power plant in France, Europe. This facility uses a nuclear reactor as a heat source, providing cheap and clean energy.
The importance of nuclear energy for decarbonization
Despite concerns related to safety and radioactive waste management, nuclear power has established itself as a reliable and efficient source of carbon-free energy. In a global context where reducing greenhouse gas emissions is an urgent priority, nuclear power’s ability to generate large amounts of electricity without contributing to climate change makes it a crucial component in the energy transition.
With a significantly lower carbon footprint compared to fossil fuels, nuclear plants can operate continuously, providing stable, large-scale power. This is especially relevant in regions with high energy demand or where intermittent renewables, such as solar and wind, cannot fully meet supply needs. As nuclear technologies advance, the implementation of safer and more efficient reactors can also help mitigate the risks associated with this type of energy.
Grids and storage: Keys to the energy transition
The challenge of power grids
Electricity grids have traditionally been a bottleneck in the transition to a cleaner energy system. However, investment in grid infrastructure has begun to increase significantly, with projected spending of $400 billion by 2024. Grids are essential for the integration of renewable energy sources, such as solar PV and wind, which require infrastructure capable of managing their intermittent nature.
Latin America: An emerging market in power grids
In regions such as Latin America, spending on grid investment has doubled since 2021, with countries such as Brazil, Chile, and Colombia leading the way. This growth reflects the need to modernize infrastructure to meet growing demand for clean energy and improve the reliability of electricity supply in the region.
Energy storage: A critical component
Energy storage is one of the fastest-growing areas in the energy transition. By 2024, investments in energy storage are expected to exceed $50 billion. Storage is crucial to ensure that renewable energy sources, such as solar power, can supply energy even when conditions are not favorable for its generation (e.g., at night or on cloudy days).
Figure 2, presents a detailed view of a battery energy storage system located in an industrial container on a green lawn. In the background, a photovoltaic power plant can be seen, highlighting the integration of clean energy and storage technology.
Energy efficiency: Improving energy usage
Resilience of energy efficiency in buildings and industry
Energy efficiency is another key component in the energy transition to a more sustainable future. Despite global economic challenges, investments in improving energy efficiency have shown great resilience. Efforts to improve energy efficiency in buildings and industries continue to be a priority, helping to reduce energy consumption and carbon emissions.
Electric transportation: A key driver of growth
The transportation sector is one of the main drivers of clean energy investment. Sales of electric vehicles are on the rise, which has led to a significant increase in investments in charging infrastructure and renewable energy to power these vehicles. Investment in the transportation sector is projected to increase by 8% by 2024, reflecting the growing demand for electric vehicles worldwide.
Challenges in the energy transition
Despite the growing momentum towards clean energy, the energy transition faces a number of challenges:
- Infrastructure: The construction of new transmission and distribution networks, as well as the integration of intermittent energy sources such as solar and wind, require significant investments and long-term planning.
- Upfront costs: While the costs of renewable technologies have decreased significantly, upfront investments remain high, which may limit access for some countries and communities.
- Fluctuations in raw material prices: Dependence on certain raw materials, such as lithium for batteries, may expose the sector to price volatility.
- Resistance to change: The energy transition involves profound changes to existing energy systems and can generate resistance from traditional industrial sectors and local communities.
Impact of geopolitics
Geopolitics significantly influences the energy transition
Competition for resources
The growing demand for critical minerals for clean technologies can generate geopolitical tensions and affect the supply chain. For example, the demand for lithium, essential for electric vehicle batteries, has generated intense competition between countries such as China, Australia, and Chile. These countries have the largest lithium reserves and have implemented policies to secure its supply and processing, which has led to trade tensions and disputes over mining rights.
Rare earth elements are an example. These minerals, crucial for the manufacture of magnets and electronic components used in renewable energies and clean technologies, are mainly concentrated in China. This dependence has raised concerns about security of supply and has prompted other countries to develop their own production capabilities.
Energy security
Energy transition can reduce dependence on imported fossil fuels, improving countries’ energy security. Take Germany and Russian gas. Before the crisis in Ukraine, Germany relied heavily on Russian natural gas to meet its energy needs. The Russian invasion and Western sanctions forced Germany to accelerate its transition to renewable energy and diversify its sources of supply, with the aim of reducing its dependence on a single supplier and increasing its energy security.
Example, the United States and shale gas production. The boom in shale gas production in the United States has transformed its energy landscape, reducing its dependence on oil and natural gas imports. This increased energy independence has given the United States greater geopolitical clout and allowed it to take a stronger stance in international climate negotiations.
International cooperation
Cooperation between countries is essential to address global challenges related to climate change and energy transition. For example, the Paris Agreement. This international agreement, signed by almost all countries in the world, establishes a common framework for the fight against climate change and the transition to low-carbon economies. Cooperation between the signatory countries is essential to achieve the goals set and avoid the worst impacts of global warming.
Case in point, the Belt and Road Initiative. China has launched this ambitious infrastructure initiative with the aim of connecting Asia with Europe and Africa. Although it has multiple objectives, one of them is to secure the supply of energy resources for China and to promote the development of clean energy technologies in the participating countries.
Conclusions
The future of clean energy is marked by historic investments that are reshaping the global energy landscape. With global investment exceeding $2 trillion by 2024, the focus on technologies such as solar PV, nuclear power, and energy storage is crucial to achieving an energy transition to a more sustainable and resilient energy system.
However, significant challenges remain, particularly in emerging clean energy markets, where investment in renewable energy remains insufficient. To ensure a cleaner and more affordable energy future, it is essential that both governments and businesses continue to encourage investment in key infrastructure, power grids, and energy efficiency solutions.
Excellent audiovisual content will complement the information presented in this article. Below is the YouTube video: “The Future of Energy: An Overview”. Source. World Economic Forum.
The Future of Energy: An Overview.
Invest in clean energy today and be part of the sustainable future!
References
- Informes de la Agencia Internacional de la Energía (AIE)
- BloombergNEF
- IRENA (International Renewable Energy Agency)
- Oil Price.com
- Fundación para la sostenibilidad Energética y Ambiental: Funseam
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