(Oil Price) – Despite historic political headwinds against the global decarbonization effort, clean energy spending continues to see a meteoric rise around the world.
The International Energy Agency’s World Energy Investment 2026, published in May of this year, projects that of the $3.4 trillion dollars that the world will spend on energy investments this year, $2.2 trillion will go to clean energy, and just $1.2 trillion will go to fossil fuels.
This marks a historic shift in energy spending and in energy security priorities on a global level. Worldwide, energy markets are in a state of extreme upheaval thanks to compounding energy crises coming from many different directions and causes. We can read a lot into the fact that clean energy is being buoyed by energy security anxieties. Looking at where the money is flowing shows us clearly that, to global leaders, clean energy now represents the future of safety, affordability and resilience. This is a massive pivot from how energy security has been viewed historically.
Until now, coal, oil, and gas have represented safety and security, stalwart and trustworthy in comparison to the great clean energy experiment.
Ongoing conflict in countries at the center of global flows of oil and gas has created a huge degree of uncertainty and volatility in fossil fuel markets. While most of the world was still struggling to recover from oil and gas price shocks and redrawn energy supply chains stemming from Russia’s 2022 invasion of Ukraine, markets were hit with a whole new – and much more extreme – wave of energy supply disruptions from the United States’ and Israel’s war in Ukraine.
These conflicts give clean energies a critical advantage in terms of energy autonomy and independence. “Wind and solar cannot be embargoed, blockaded, or shut off by a foreign power,” David Frykman, General Partner at Stockholm-based venture capital group Norrsken, wrote in a March op-ed for Fortune. “Every terawatt-hour of domestic renewable generation is a terawatt-hour that no adversary can weaponize.”
And that independence also saves a lot of money for fuel-importing countries. The International Energy Agency estimates that clean energy and efficiency allowed the world’s five largest fuel-importing regions to save $260 billion in avoided fossil fuel imports in 2025. “That is not only a climate benefit,” Forbes recently editorialized. “It is independence.”
In addition to ongoing disruptions to oil and gas supply, there are also major upsets happening on the demand side of the equation. The artificial intelligence boom is causing energy demand projections to soar to unprecedented heights, leaving the public and private sectors alike scrambling to add energy capacity as quickly and cheaply as possible. Newly released UN research shows that data centers’ consumption of water and energy is expected to fully double by the end of the decade, meaning that energy production will have to keep the same breakneck pace of expansion.
“Power demand from artificial-intelligence data centers continues to boost investment in renewables, with US data-center electricity consumption projected to triple by 2035 from 2024 levels,” Bloomberg recently reported. A lot of this investment has come from the emerging economies in the Global South, as renewables have quite simply become too cheap to fail.
While the data overall paints a clear trend toward renewables, however, the granular data is more complicated and nuanced. “Markets with supportive revenue mechanisms have maintained momentum on renewable energy investment,” says Meredith Annex, Head of Clean Power at BloombergNEF. “Whereas projects in markets where revenue certainty is shifting, particularly when it’s down to large swings in policy as in the US or mainland China, are seeing a boom-bust cycle ahead of those changes.”
And while investors around the world are pouring more money into clean energies than ever before, governments are continuing to provide trillions of dollars to prop up and subsidize the fossil fuel industry. But even when considering public spending on fossil fuels, clean energies still come out ahead in the investment numbers. The writing is on the wall: we are officially leaving the petro-era and entering the age of electricity.
By Haley Zaremba for Oilprice.com
