Global Energy Industry Investments to hit $2.4 trillion in 2022: IEA Report

Global Energy Industry to hit $2.4 trillion 2022


Global Energy Industry to hit $2.4 trillion 2022

Global Energy Industry Investments – Growth Driven by Clean Energy Sources and Coal

From oil and gas to wind and solar energy & renewable power, your portfolio may benefit from global industry energy investments.  The power and energy industry is one of the fastest growing industries in the world. The International Energy Agency (IEA) has anticipated growth of up to 8% and total spending of Dollars 2.4 trillion in the energy industry this year. The major source will come from renewable energy.

Well, the numbers are interesting, but it has to face the hurdles coming from several aspects of the world’s energy crisis. The spark of the energy crisis started with the Ukraine – Russia conflict. Due to its high demand and short supply, oil and gas prices will continue to rise in the coming future. However, this has increased the demand for the cleanest and a secure source of energy.

Global energy industry investment’s fastest growth is coming from the power sector. World Energy Investment 2022 report said that there has been a speed investments rise in the power and energy industry, especially in renewables and energy efficiency. There is not any clear indication given on how much spending will be done on green energy due to concerns regarding security issues as well as the initial price of these energy sources are relatively higher in comparison to other energy sources.

Therefore you may find clean energy in the advanced economies and developed countries like UAE as they will be able to afford it. Energy efficiency in UAE is attained through various investments in various sectors. They also made Dubai: A Sustainable and Smart City to live in. However other developing countries are growing their investments in cheaper energy sources like coal (fossil fuel). Global energy industry investments are an investment in energy independence.

Fatih Birol, who is the Executive Director of International Energy (IEA) mentioned the fact that we can’t ignore the crisis happening in the world (environmental issues), whether it is related to energy or climate. The world is trying to solve both of these issues. He believes investing in the clean energy industry is the only long-term solution that can ease the burden of consumers from rising oil prices to combating climate change. He was also an active participant along with other world leaders in the G7 Summit. This event was on 27th June 2022 and it was located in Elmau, Germany. He gave a speech on how IEA is responding to the global energy crisis.

This event was held by Chancellor Olaf Scholz and he invited five countries – Argentina, India, Indonesia, and South Africa to grace their presence on major discussion topics like energy and climate challenges.

From 2015 (The Year when Paris Agreement was signed) till 2021, the growth for clean energy is seen only by 2%, which is quite less in comparison to the numbers that were expected. Although the year 2020 is also known as the global pandemic year, there has been a significant growth of up to 12%. Smart buildings in UAE is one of the greatest investment by one of the largest oil producing country. Cybersecurity is also becoming important in the energy sector and hence investments and improvements are done in this industry also. 

Global energy industry investments are increasing in all parts of the energy sector. The spending has been supported by Government fiscal assistance and the emergence of corporate sustainability, particularly in industrialized nations. More than 80% of all investments in the energy industry are being made in renewables, grids, and storage. At current growth rates, investments in wind turbine, hydraulic turbine, solar PV, floating wind turbine, power systems engineering, batteries (gravity batteries), and electric vehicles – EV will allow the world to achieve net zero emissions by 2050.

Various types of forging methods are considered to be the cost-effective and preferred process with which metal components of high quality, integrity, and performance are produced. The forging industry is anticipated to be energy efficient and environmental management in the future. With the energy investments growing, the forging vs casting industry is also pitching upwards. 

Supply Chains are also taking a prominent part in contributing to the rise in spending. Almost haft of its investments is coming from businesses paying a higher initial price for the product. This price is derived from various costs that are taken into consideration like labour wages and buying of raw materials (Steel, Cement, and Other Important Minerals).

There has been a bloom as many industrialists are spending their money on some of the emerging technologies, batteries used for energy storage, hydrogen, and low carbon emission energies, but this case is quite opposite for developing countries like India. Example – There has been no growth in the solar energy industry in India and the figures are quite the same as in 2015, the year when Paris Agreement was signed. Some factors relating to this situation are fragile policy frameworks, low investments from the government, economic clouds, and rising borrowing costs. These kinds of hindrances are stopping clean energy to grow as rapidly as the developed nations.

An alarming signal we believe everyone needs to know is a 10% increase in spending on coal in the year 2021. The demand is coming from China and the other advancing economies countries in the Asia Region. A sustainable future is the aim of many countries.

Global energy industry investments can reduce volatility and increase returns to your portfolio. Today oil and gas prices have shot up and with more consumers ready to buy, it is expected that oil and gas companies would earn tremendous profits, resulting in the industry income reaching $4 trillion in the year 2022, which is double the average income of five years.

Our parent company ADGECO GROUP, which is an oil and gas company, is diversifying its funding in the clean energy industry. We at RSE FZE, along with our parent company believe that clean energy requires significant investments so that it would break the barrier of weak supply chains and rising prices.


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