Upstream oil & methane investment is set to fall for the first time since 2020 by 4% globally. Follow the money, not the vested interests' claims.\n
The IEA forecasts global BESS (utility scale plus behind the meter) investments in 2025 will triple that of 2022, and is set to reach the level of global methane-fired power capacity investment this year.”\n
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\nTim Buckley \nDirector, Climate Energy Finance\n
\n\n","recentPosts":[{"id":9594972,"title":"New energy, old business model","slug":"new-energy-old-business-model","status":"published","readingTime":9,"campaignCompletedAt":"2025-07-03T21:30:22.000Z","publishedAt":"2025-07-03T21:30:22.000Z","orderByDate":"2025-07-03T21:30:22.000Z","timeAgo":"about 4 hours","thumbnailUrl":"https://embed.filekitcdn.com/e/skEYEeNCViujsSTwA7sPkJ/pYrDF8xSSVaJETDzzvKELk?auto=","thumbnailAlt":"","path":"posts/new-energy-old-business-model","url":"https://newsletters.theenergy.co/posts/new-energy-old-business-model","isPaid":null,"introContent":"Hey Reader, welcome to The Energy. In today's edition: Call to reform NEM governance New energy powered by a centuries-old business model Selling the transition, one REZ at a time Climb out of a centralised quagmire A green paper released by the Energy Efficiency Council warns current markets in the NEM are not, on their own, sufficient to drive optimisation of investment and operation of supply- and demand-side measures. NEM Governance Reform: Options for the Future Electricity System points...","campaignId":20079971,"publicationId":16651262,"metaDescription":""},{"id":9574732,"title":"Squaring net zero with lowest cost","slug":"squaring-net-zero-with-lowest-cost","status":"published","readingTime":9,"campaignCompletedAt":"2025-07-02T21:30:16.000Z","publishedAt":"2025-07-02T21:30:16.000Z","orderByDate":"2025-07-02T21:30:16.000Z","timeAgo":"1 day","thumbnailUrl":"https://embed.filekitcdn.com/e/skEYEeNCViujsSTwA7sPkJ/pYrDF8xSSVaJETDzzvKELk?auto=","thumbnailAlt":"","path":"posts/squaring-net-zero-with-lowest-cost","url":"https://newsletters.theenergy.co/posts/squaring-net-zero-with-lowest-cost","isPaid":null,"introContent":"Hey Reader, welcome to The Energy. In today's edition: Economists put net zero above cost in transition Potent exposure to methane emissions VNI West delay will bite Countering the least-cost bias The net zero goal matters more than the cost when transforming Australia’s energy system, according to a poll of leading economists. Asked to identify the most important of three goals for the future energy system, 18 of the 40 polled in the latest Economic Society of Australia survey picked getting...","campaignId":20065376,"publicationId":16636634,"metaDescription":""},{"id":9562828,"title":"Grid shift still needs to accelerate","slug":"grid-shift-still-needs-to-accelerate","status":"published","readingTime":3,"campaignCompletedAt":"2025-07-01T21:31:03.000Z","publishedAt":"2025-07-01T21:31:03.000Z","orderByDate":"2025-07-01T21:31:03.000Z","timeAgo":"2 days","thumbnailUrl":"https://embed.filekitcdn.com/e/skEYEeNCViujsSTwA7sPkJ/pYrDF8xSSVaJETDzzvKELk","thumbnailAlt":"","path":"posts/grid-shift-still-needs-to-accelerate","url":"https://newsletters.theenergy.co/posts/grid-shift-still-needs-to-accelerate","isPaid":null,"introContent":"Hey Reader, welcome to The Energy's weekly data newsletter. This week we kick off our quarterly review of energy market data. June quarter shows grid transition’s pitfalls, progress Australia’s two main electricity grids added more renewables to the energy mix in the June quarter, but a familiar early winter freeze, wind drought and coal plant failure on the east coast set prices soaring and teeth on edge in late May and June. Across the quarter, wind, solar and battery storage increased...","campaignId":20050994,"publicationId":16622247,"metaDescription":""}],"newsletter":{"formId":7599235,"productId":null,"productUrl":null,"featuredPostId":null,"subscribersOnly":false},"isPaidSubscriber":false,"isSubscriber":false,"originUrl":"https://newsletters.theenergy.co/posts/the-good-and-the-bad-news-on-clean-energy","creatorProfileName":"The Energy","creatorProfileId":1927223}The good and the bad news on clean energy
The Energy
The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.
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The good and the bad news on clean energy
Published 23 days ago • 5 min read
Hey Reader, welcome to The Energy's weekly data newsletter. This week we dive deeper into the latest data on global energy investment from the International Energy Agency.
Good and bad news in clean energy
In good news for all bar the LinkedIn warriors still second guessing the clean energy transition,global investment in clean energy is outstripping traditional fossil fuels by a widening margin, led by China’s solar and battery boom.
But in bad news for everyone – whether they recognise it or not – investment in fossil fuels remains sticky as China continues to take out insurance against power shortages in the form of coal power and the US backslides on climate commitments.
The International Energy Agency’s World Energy Investment 2025 offers a frustrating snapshot of a global energy transition proceeding at a “two steps forward, one step back” pace, with too many nations hedging their bets.
It is accelerating but not quickly enough to meet the world’s 2015 Paris commitments to the keep global temperature increase from pre-industrial levels “well below” 2 degrees Celsius and preferably below 1.5C, which the world blasting through.
And that’s bad news for the world’s most vulnerable people, as a cascade of extreme weather events that disproportionately hurt them attests.
China dashes ahead
It’s no surprise that China’s investments in renewable energy, nuclear power, grids and storage are setting a cracking pace, at more than twice the rate of the United States and the European Union, the second and third largest clean energy investors.
Plummeting prices for solar panels, batteries and — until a few years ago when supply chains seized up and inflation took hold — wind turbines have triggered a near doubling of investment worldwide in the past five years.
Investment in solar power is expected to hit $US450 billion in 2025, — almost a third of total investment in the power sector. Large strides — albeit from a lower base — are also being made in India, Africa and Southeast Asia. Meanwhile, China is the only producer of wind turbines bending the cost curve downwards on that technology.
A surprising upstart — Pakistan — came from nowhere to import 19 gigawatts of solar panels from China in 2024, as the country's energy users revolted against corrupt and incompetent state-linked power companies.
China's investments in clean energy, grids and storage are more than double those of its nearest rivals the US and Europe. Source: IEA
Thermal power is dwarfed by renewables
Another surprising thing in light of the febrile debate on the energy transition during Australia’s recent election campaign and around the world is how small investment in thermal power is relative to renewables.
Thermal power involves the use of coal, gas and nuclear energy to boil water and create steam to drive turbines. As the chart below shows, thermal power from these sources is dwarfed by spending on renewables, and battery storage is expanding rapidly from a low base.
Total investment in the global power sector, including grids, was nearly $US1.5 trillion in 2024, up by more than half since COVID struck in 2020, and fossil fuel power accounted for less than a seventh of the total.
This pattern is repeated more or less across ideological borders, something to bear in mind when proponents of a return to traditional “baseload” power bend your ear on social media or at the pub.
Marring this picture, the share of investment going to emerging and developing economies has fallen from nearly 30 per cent a decade ago to just above 20 per cent, a yardstick for the failure of rich economies to stump up enough affordable finance.
Investments in fossil fuel power were less than a seventh of total power investments in 2024. Source: IEA
Batteries rival gas power
Investment in batteries has come from negligible levels just five years ago to nudge closer to investment in gas power generation with $66 billion expected to be invested in the storage technology this year.
That’s significant because batteries and gas peaking plants compete with each other to firm wind and solar power when the sun goes down or the wind doesn’t blow. And Australia is a big player in batteries, with a 10 GW-plus development pipeline.
It’s true that batteries aren’t yet economical for longer duration duties such as prolonged wind and solar droughts of a week or more, where gas peakers will be required for years — perhaps decades — to come.
But they could push gas peakers’ out of regular daily firming power duties, undermining the economics for their investors and pushing governments to ponder alternative support mechanisms.
Global investment in battery storage will nudge investment in gas power generation this year. Australia's growing battery investment is included in the OECD Pacific column. Source: IEA
Low emissions fuels still a rounding error
On the downside, total investments in oil, coal and gas are not falling quickly enough, while investments in low emissions fuels such as biomethane and green hydrogen remain tiny in comparison.
Oil and gas companies invested around $US22 billion in low emissions energy technologies in 2024, around 25% less than in 2023, the IEA says. Majors have revised low-emissions targets down sharply, and another 10% fall is on the cards for 2025.
New players, including national oil and gas companies, are stepping in to fill the breach, but the trend is discouraging because low emissions substitutes for oil and gas are needed urgently to decarbonise shipping and aviation.
Oil and gas majors have pulled back their spending on low emissions fuels sharply, but this is partly offset by new players and national oil and gas companies. Source: IEA
Expert view
“Australia is absolutely walking both sides of the street, as we saw with the Albanese government's approval of a 40 year extension on the North West Shelf gas processing plant. We are still a major, top three fossil fuel exporter. The incumbent industry is still very powerful politically in Australia, and that undermines Australia's long term strategic national interest, in my view.
It is definitely two steps forward, one step back at best. But we have seen Australia is going to be a major beneficiary of the massive scaling up of batteries, solar, wind and EVs — we get the benefit of dramatically lower costs. And although batteries, as yet, haven't seen massive deflation, for example, in the residential market, it's only a matter of time.
The IEA reports that the world continues to electrify and decarbonise. Power sector investment reached a new high of US$1.5 trillion in 2024, driven primarily by record investment in sources of low-emissions generation, as well as grids and battery energy storage systems (BESS).
Upstream oil & methane investment is set to fall for the first time since 2020 by 4% globally. Follow the money, not the vested interests' claims.
The IEA forecasts global BESS (utility scale plus behind the meter) investments in 2025 will triple that of 2022, and is set to reach the level of global methane-fired power capacity investment this year.”
The Energy is dedicated to covering the business of energy and in particular the people, capital, projects and emerging technology behind the energy transition.
Hey Reader, welcome to The Energy. In today's edition: Call to reform NEM governance New energy powered by a centuries-old business model Selling the transition, one REZ at a time Climb out of a centralised quagmire A green paper released by the Energy Efficiency Council warns current markets in the NEM are not, on their own, sufficient to drive optimisation of investment and operation of supply- and demand-side measures. NEM Governance Reform: Options for the Future Electricity System points...
Hey Reader, welcome to The Energy. In today's edition: Economists put net zero above cost in transition Potent exposure to methane emissions VNI West delay will bite Countering the least-cost bias The net zero goal matters more than the cost when transforming Australia’s energy system, according to a poll of leading economists. Asked to identify the most important of three goals for the future energy system, 18 of the 40 polled in the latest Economic Society of Australia survey picked getting...
Hey Reader, welcome to The Energy's weekly data newsletter. This week we kick off our quarterly review of energy market data. June quarter shows grid transition’s pitfalls, progress Australia’s two main electricity grids added more renewables to the energy mix in the June quarter, but a familiar early winter freeze, wind drought and coal plant failure on the east coast set prices soaring and teeth on edge in late May and June. Across the quarter, wind, solar and battery storage increased...