World investing more in clean energy – IEA 2024 report

Jul 18, 2024 News

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…as countries wean off fossil fuels 

Kaieteur News – The world is now investing twice as much in clean energy compared to fossil fuels, a new report from the International Energy Agency (IEA) has found.

The IEA in its World Energy Investment 2024 report, released in June, explained that global energy investment is set to exceed US$3 trillion for the first time in 2024, with US$2 trillion going to clean energy technologies and infrastructure.

According to the document, “Investment in clean energy has accelerated since 2020, and spending on renewable power, grids and storage is now higher than total spending on oil, gas, and coal.”

The International Energy Agency said as the era of cheap borrowing comes to an end, certain kinds of investment are being held back by higher financing costs, however, the impact on project economics has been partially offset by easing supply chain pressures and falling prices.

The reduced cost of solar power in recent years contributed to these investments. “Solar panel costs have decreased by 30% over the last two years, and prices for minerals and metals crucial for energy transitions have also dropped sharply, especially the metals required for batteries,” the World Energy Investment 2024 report stated.

This year, clean energy investments are set to approach US$320 billion, up by more 50% since 2020. The gains primarily come from higher investments in renewable power, now representing half of all power sector investments.

According to the report, “Progress in India, Brazil, parts of Southeast Asia and Africa reflects new policy initiatives, well-managed public tenders, and improved grid infrastructure.” Additionally, Africa’s clean energy investments in 2024, at over US$40 billion, are nearly double those in 2020.

Be that as it may, the IEA pointed out that more needs to be done in this regard since in most cases, this growth comes from a very low base and many of the least-developed economies are being left behind with several facing acute problems servicing high levels of debt.

Despite the massive reduction in the cost for solar power generation, the Government of Guyana is pushing ahead with its plan to construct a US$2B Gas-to-Energy project in the absence of a feasibility study. That project is expected to provide the national grid with 300 megawatts (MW) of electricity.

The administration has been challenged in the past to prove the gas project a more feasible option compared to gas but has failed to do so. In fact, the argument put forth by Vice President Bharrat Jagdeo is that solar cannot provide a stable source of electricity.

Award winning international Lawyer, Melinda Janki in a letter to the United States Export Import (US-EXIM) Bank in April this year flagged government’s failure to publish coherent and convincing financial analysis to support the business case for the gas project.

In her April 25, 2024, letter to the President of the US-EXIM Bank, Reta Jo Lewis, Janki indicated that the financial institution might wish to obtain this information before further considering the government’s loan application.

It was reported in April 2023 that the GoG applied to the US-EXIM Bank for a US$646M loan to fund a natural gas-fired power plant and natural gas liquids plant to be constructed by contractor CH4-Lindsayca. The plants, to be constructed at Wales, West Bank Demerara are part of the GTE project, which also includes a pipeline being built by ExxonMobil Guyana Limited to transport the gas from offshore to the site.

The US-EXIM Bank has not yet approved Guyana’s application for the loan and is said to be in the concluding phase of its independent analysis of the project. “The cost of this Project will be borne by the Guyanese public because the government will have to take money from the public purse or use public assets such as oil in order to pay ExxonMobil Guyana and the other contractors. Similarly, any loan from Exim Bank will have to be paid back from public money,” the Lawyer reasoned.

To this end, she explained that the people of Guyana are therefore entitled to see that the proposed gas project is financially viable before the government seeks to borrow money to proceed. She argued, “It is not sufficient for the government to make promises. Economic development is not a matter of wishful thinking. Economic development requires robust economic analysis of the global energy market. The proposed project will lock Guyana into gas at a time when the fossil fuel industry is in decline and is likely to leave Guyana with stranded assets and an adverse impact on Guyana’s economy.”

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• Electricity, fossil fuels, gas, invests, oil

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