Renewable energy investment matches fossil fuels in 2022 for 1st time
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Renewable energy investment matches fossil fuels in 2022 for 1st time
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Context: For the very first time in history, investment in low-carbon energy technologies worldwide was equal to money spent on fossil fuels, according to BloombergNEF, a global strategic research service provider.
More on the News:
- The amount of investment in cleaner energy technology in 2022 was $1.1 trillion.
- Investment towards energy transition grew by $261 billion from the previous year — a 31 per cent increase from 2021. But the investment in fossil fuels was also simultaneously up $214 billion over 2021 levels.
- The growth in fossil fuel investments in 2022 occurred against the backdrop of high commodity prices, with many oil and gas majors earning record profits.
- Increased climate awareness has, however, made these companies more focused on share buybacks and diversifying to lower-carbon assets.
- The researchers broke down the investment into various categories: Renewable energy remained the largest sector at $495 billion (up 17 per cent year-on-year) and electrified transport was growing much faster and hit $466 billion (up 54 per cent).
- The hydrogen sector received the least boost at $1.1 billion but the sector grew the fastest, tripling investment every year.
- Investment in clean-technology factories grew fourfold from 2018 and reached $78.7 billion in 2022.
- Battery-related factory spending is growing at pace and now attracts more investment than other clean-tech sectors at $45.4 billion in 2022. Facilities to produce lithium-ion battery components accounted for about 58 per cent of facilities opened in 2022.
- China is still the leading manufacturer of low-carbon technologies because it attracted over half of the trillion-dollar investment at $546 billion. This was followed by the European Union at $180 billion and the United States at $141 billion.
Promotion of Renewable energy
Steps taken:
- Permitting Foreign Direct Investment (FDI) up to 100 percent under the automatic route.
- Waiver of Inter State Transmission System (ISTS) charges for inter-state sale of solar and wind power for projects to be commissioned by June 2025
- Declaration of trajectory for Renewable Purchase Obligation (RPO) up to the year 2030.
- Setting up of Ultra Mega Renewable Energy Parks to provide land and transmission to RE developers on a plug and play basis.
- Schemes such as Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Solar Rooftop Phase II, 12000 MW CPSU Scheme Phase II, etc.,
- Laying of new transmission lines and creating new sub-station capacity under the Green Energy Corridor Scheme for evacuation of renewable power.
- Setting up of Project Development Cell for attracting and facilitating investments.
- Standard Bidding Guidelines for tariff based competitive bidding process for procurement of Power from Grid Connected Solar PV and Wind Projects.
- Government has issued orders that power shall be dispatched against Letter of Credit (LC) or advance payment to ensure timely payment by distribution licensees to RE generators.