Global energy investments set to recover in 2021 but remain far from a net-zero pathway
With pandemic restrictions lifting, energy investment is set to return to pre-crisis levels – according to the International Energy Agency (IEA), global investment in energy is predicted to rebound by 10% to $1.9 trillion US dollars. In particular, renewables are expected to account for 70% of new power generation capacity this year.
Unfortunately, however, more resources need to be directed towards sustainable green energy in order to put the world on track to be able to reach net-zero emissions by 2050. According to Fatih Birol, the IEA’s executive director, clean energy investment will need to triple by 2030 in order to reach Canada’s renewable energy policy of net zero emissions by 2050.
Additionally, the World Energy Investment report by the IEA finds that there is a lack of high-quality clean energy projects despite clean energy companies performing well on the market, due to insufficient channels to move funds intended for clean energy in the right direction.
How is Canada Investing in Renewable Energy?
In early June 2021, a 964 million dollar program (the Smart Renewables and Electrification Pathways Program) in Canada was launched for supporting smart renewable energy in Canada and grid modernization projects as a part of Canada’s commitment to providing communities with clean electricity and reaching net-zero emissions by 2050.
The Smart Renewables and Electrification Pathways Program supports qualifying projects under the following streams:
- Established Renewables (e.g., solar photovoltaic, onshore wind, small hydro.)
- Emerging Technologies (e.g., energy storage, geothermal energy.)
- Grid Modernization (e.g., virtual power plants, micro-grids, software and hardware to enable grid services.)
How does Canada’s renewable energy generation compare to other countries?
According to Natural Resources Canada (NRCan), renewable energy sources currently provide about 16% of Canada’s total primary energy supply. Overall, the primary source of renewable energy in Canada is hydro, or moving water, which accounts for 67.5% of Canada’s renewable energy production.
Below is a chart for how Canada ranks among other countries for renewable energy production:
| Rank | Country | Percentage of Renewable Energy |
| 1 | China | 15% |
| 2 | India | 11% |
| 3 | United States | 9% |
| 4 | Brazil | 7% |
| 5 | Nigeria | 6% |
| 6 | Indonesia | 4% |
| 7 | Canada | 3% |
How much renewable energy does the world use?
Below is a table representing the share of renewable energy in total world energy consumption, liquid fuels production, and electricity generation as of 2018, as well as predictions of renewable energy consumption and production for future years.
| 2018 | 2030 | 2040 | 2050 | |
| Energy Consumption | 15% | 22% | 25% | 28% |
| Liquid Fuels Production | 2% | 2% | 2% | 2% |
| Electricity Generation | 28% | 40% | 46% | 49% |
Key facts and figures for understanding where energy investment is and where it is headed
Overall, global energy demand is set to increase by 4.6% in 2021, with a shift towards cleaner energies. See the below figures for energy supply and end-use in North America:
| North America | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
| Total (billion $2019) | 450 | 415 | 428 | 433 | 430 | 364 | 399 |
| Supply (by type) | 396 | 362 | 377 | 384 | 381 | 318 | 347 |
| Fossil fuels (fuel supply & power) | 265 | 226 | 248 | 250 | 238 | 169 | 192 |
| Renewables | 58 | 55 | 47 | 56 | 63 | 62 | 65 |
| Electricity networks | 67 | 70 | 71 | 71 | 75 | 79 | 81 |
| Other supply | 7 | 11 | 12 | 7 | 5 | 8 | 9 |
| End-use | 53 | 53 | 50 | 49 | 48 | 46 | 52 |
| Energy efficiency | 52 | 52 | 49 | 47 | 47 | 44 | 51 |
| Renewables and other end-use | 1 | 1 | 1 | 2 | 1 | 1 | 1 |
| Power | 147 | 153 | 144 | 147 | 155 | 165 | 172 |
| Generation | 80 | 83 | 73 | 75 | 80 | 85 | 89 |
| Coal | 0 | 0 | 0 | 0 | 0 | 1 | 1 |
| Gas and oil | 17 | 19 | 17 | 15 | 13 | 17 | 18 |
| Nuclear | 7 | 10 | 11 | 6 | 5 | 6 | 7 |
| Renewables | 56 | 54 | 45 | 55 | 62 | 61 | 63 |
| Battery Storage | 0 | 0 | 0 | 1 | 1 | 2 | 3 |
| Electricity networks | 67 | 70 | 71 | 71 | 75 | 79 | 81 |
Clean energy spending is set to increase 7% in 2021 – however, funding has grown faster than actual expenditures. Below is a figure depicting the investments in renewable energy over recent years:
Worldwide, 750 billion USD is expected to be spent on clean energy technologies and efficiency worldwide. However, clean energy investment would need to double in the 2020s in order to keep temperatures from rising above 2 degrees Celsius overall. If investment tripled, global warming could be limited to 1.5 degrees Celsius.
Even though investment in clean energy sources is increasing, it’s important to remember that traditional energy sources such as coal have not been eradicated. For example, some countries such as China, have lowered restrictions towards constructing new plants. In other countries, such as Cambodia, Indonesia and Pakistan, coal-fired final investment decisions picked up in 2020.
Public spending in the research and development of energy rose in 2020 with the share of low-carbon technologies in the total rising to 80% – however, the spending in private sectors for research and development of energy decreased by 2% in part due to corporate budgets decreasing because of the pandemic.
By 2030, it’s estimated that over 50 billion USD of public funds could be available for major demonstration projects for large-scale low-carbon energy technologies, including carbon capture, utilization and storage and other ways to mitigate industrial emissions.
