The IEA’s World Energy Investment 2022 report said that the fastest growth in investment is from the power sector, mainly driven by renewables and grids, and from energy efficiency.

However, it flagged that spending on clean energy is not evenly spread as most of it is in advanced economies and China, whilst some markets with energy security woes and high prices are compelled to invest higher in fossil fuel supplies like coal.

“We cannot afford to ignore either today’s global energy crisis or the climate crisis, but the good news is that we do not need to choose between them – we can tackle both at the same time,” said IEA Executive Director Fatih Birol in the statement.

“A massive surge in investment to accelerate clean energy transitions is the only lasting solution. This kind of investment is rising, but we need a much faster increase to ease the pressure on consumers from high fossil fuel prices, make our energy systems more secure, and get the world on track to reach our climate goals,” Birol added.

The IEA said that renewables, grids, and storage account for over 80% of the total investment in the power sector, whilst spending on solar, batteries and electric vehicles are at growing in line with the global net-zero emissions target by 2050.

On the other hand, IEA said tight supply chains also played a large part in the record investment, adding that almost half of the overall increase in spending reflects higher costs from labour and services to materials.

It said that this is a barrier that keeps some energy companies from increasing their spending more quickly.

Investment in clean energy only rose by 2% in five years following the signing of the Paris Agreement in 2015. The growth rate sped up significantly to 12% since 2020, it said.