For the world to stay on track to achieve net zero emissions targets, $1 invested in fossil fuels should attract a $2.9 investment in clean energy supplies. This is the position presented in the Bloomberg New Energy Finance (BloombergNEF) Outlook 2022.
- The outlook said: “For every dollar invested in fossil energy supplies between now and 2030, $2.9 must be invested in clean energy supplies, such as renewable energy, clean hydrogen, and carbon capture, increasing to nearly $10 after 2040. These ratios can provide a guide for financial institutions that wish to align their investing and lending activities to a net zero trajectory”.
Investments in figures: The outlook says BloombergNEF’s Net Zero Scenario (NZS) implies an investment opportunity of $194 trillion by 2050, implying annual investment of $5.5 trillion a year for the remainder of this decade at $ 7.4 trillion a year in the 2040s. These totals include investment in clean and fossil energy supply projects, as well as clean demand-side areas such as electric vehicles and heat pumps. Electric vehicles alone attract 47% of all investment tracked to 2050 in the NZS. The outlook said:
- “The ratio of investment in clean energy supply to fossil sources (excluding demand areas) should average 2.9 in this decade and then increase to 4.9 in the 2030s and 9.7 in the 2040s” .
Meanwhile, low carbon power occupies $45.8 trillion, or 24% of the total, and the electric grid attracts $21 trillion in investment by 2050, or 11% of the total. According to the outlook, these investments finance a substantial expansion of the global electrical system to connect new supply points and meet growing demand, driven by electrification and the growth of renewable energy, in addition to ensuring the safe and continuous operations of the existing network, through rehabilitation and replacement of old assets.
Increased adoption of clean energy supplies: Although the world has embraced clean energy to some degree, the outlook suggests that to reach net-zero emissions targets, EV sales will need to grow fivefold, from less than 11 million to 55 million per year, to meet the needs net zero emissions targets and meet sector carbon budgets. The outlook also says that solar installations will need to more than triple and wind installations will need to increase six times from current levels.
Rise of clean energy technologies: According to the outlook, the global net-zero transition is still in its infancy, with less than 10% of the required full wind and solar power technologies installed, and none of the required technologies for heat pumps, hydrogen electrolyzers, or hydrogen capture. carbon storage and storage capacity (CCS) has also been installed. However, the outlook says that more than 40% of the nuclear power capacity needed by 2050 already exists.
…For every $1 invested in fossil fuels, $2.9 should go to clean energy supplies: BloombergNEF Read more at… Naijaonpoint.