Global energy investment is projected to reach a record USD 3.3 trillion by 2025, with clean energy technologies drawing two-thirds of this total. This marks a significant shift towards electrification and decentralized energy systems, according to the International Energy Agency (IEA). Clean energy investments are expected to hit USD 2.2 trillion this year, which is double the USD 1.1 trillion allocated to fossil fuels. This increase is attributed to climate objectives, industrial policies, and concerns regarding energy security, as highlighted in the IEA’s World Energy Investment 2025 report.
Among the various sectors, solar photovoltaic (PV) systems stand out as the leading area of investment, with USD 450 billion allocated to both utility-scale and rooftop installations. Investments in battery storage are also on the rise, exceeding USD 65 billion. Investments in grid infrastructure are significant as well, totaling USD 400 billion. However, the IEA cautions that these investments are still inadequate to support the increasing share of electricity in overall energy consumption.
Fatih Birol, Executive Director of the IEA, stated, “Energy security is emerging as a key driver of investment during this period of geopolitical and economic uncertainty. Electricity is quickly becoming the new foundation of modern energy systems.”
China continues to be the largest energy investor globally, accounting for nearly a third of all clean energy spending. Its investment levels now exceed the combined totals of the European Union and the United States. The country leads in multiple sectors, including solar, wind, hydropower, nuclear energy, batteries, and electric vehicles (EVs). Additionally, investments in nuclear power are projected to rise by 50% over the next five years, reaching USD 75 billion in 2025.
In contrast, investment in coal and upstream oil and gas remains concentrated primarily in China, India, and the Middle East. However, tight oil investment in the U.S. is expected to decrease by 6%, contributing to a decline in global upstream oil spending.
Southeast Asia is experiencing a gradual transition in its energy landscape. While fossil fuels still account for 60% of the region’s energy mix, clean energy investments are anticipated to reach USD 47 billion this year, up from USD 30 billion in 2015. The manufacturing of solar PV in the region is expanding, led by countries such as Vietnam, Thailand, and Malaysia. Despite this progress, the report emphasizes the need for significant increases in grid investments to keep pace with generation and storage capabilities. Without these upgrades, the reliability of electricity supply may be compromised as demand continues to rise.
Birol remarked, “Spending trends clearly show that the world is entering the Age of Electricity. However, a secure and affordable transition requires balanced investment, particularly in the infrastructure that supports the entire system.”
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