Global Investment in the Energy Transition Exceeded $2 Trillion
China invested most and drove the majority of the growth in 2024, eclipsing the US, the EU, and the UK.
BNEF’s turbine price index indicates that component costs will decline again in 2025, but manufacturers are maintaining higher prices to improve profit margins. As of June 2024, China led the world in operating solar farm capacity with 386,875 megawatts, representing about 51 percent of the global total, according to Global Energy Monitor’s Global Solar Power Tracker.
BloombergNEF’s annually released Energy Transition Investment Trends 2025 report finds that investment in the energy transition is higher than ever, but growth has slowed. Investment in the global low-carbon energy transition grew by 11% in 2024, reaching a record $2.1 trillion.
While overall investment in energy transition technologies set a new record, the pace of growth was slower than in the previous three years, when investment increased by 24-29% annually.
Electrified Transport Leads
Electrified transport remained the largest investment driver, reaching $757 billion in 2024. This figure includes spending on passenger EVs, electric two- and three-wheelers, commercial electric vehicles, public charging infrastructure, and fuel cell vehicles.
Investments in renewable energy totaled $728 billion, covering wind (both onshore and offshore), solar, biofuels, biomass and waste, marine, geothermal, and small hydro projects.
Finally, investment in power grids amounted to $390 billion, encompassing transmission and distribution lines, substation equipment, and grid digitalization.
Mature and Emerging Sectors
BNEF’s report also reveals a significant disparity between investment in mature and emerging sectors of the clean energy economy.
Technologies that are proven, commercially scalable and have established business models, like renewables, energy storage, electric vehicles, and power grids, accounted for the vast majority of investment in 2024. These sectors drew $1.93 trillion, growing 14.7%, despite challenges from policy decisions, higher interest rates, and slower consumer purchasing expectations.
Challenges in Emerging Technologies
In contrast, investment in emerging technologies, like electrified heat, hydrogen, carbon capture and storage (CCS), nuclear, clean industry and clean shipping, reached only $155 billion, marking a 23% decline compared to last year.
Factors that discourage investment in these sectors include affordability, technology maturity, and commercial scalability. To accelerate their growth, both the public and private sectors must take stronger action to de-risk these technologies. According to the report, without such efforts, they are unlikely to make a meaningful impact on emissions by the end of the decade.
China Dominates Investment
The largest market for investment was mainland China, which alone accounted for $818 billion of investment, up 20% from 2023. China’s investment growth was equivalent to two-thirds of the total global increase in the year, with all sectors reviewed in the report showing solid growth.
The EU, US, and UK, which drove growth in 2023, experienced different trends in 2024. Investment remained stagnant in the US at $338 billion, while it declined in both the EU and UK, falling to $381 billion and $65.3 billion, respectively.
China's total investment last year exceeded the combined investment of the US, EU, and UK. Among the major markets covered in the report, India and Canada also contributed to global growth, increasing their investments by 13% and 19%, respectively.
Capital-Intensive Battery Manufacturing
BNEF’s report also tracks investment in the clean energy supply chain, including equipment manufacturing and battery metals production for energy technologies. In 2024, this investment declined slightly to $140 billion but is expected to rise to $164 billion in 2025. Around 60% of total supply chain investment last year went to batteries, as battery cell factories are particularly capital-intensive.
China’s investment growth was equivalent to two-thirds of the total global increase in the year, with all sectors reviewed in the report showing solid growth.
Investment Should Reach $5.6 Trillion Annually
BNEF reports that global energy transition investment would need to average $5.6 trillion per year from 2025 to 2030 to stay on track for global net zero by 2050, in alignment with the Paris Agreement.
This finding is based on BNEF’s New Energy Outlook 2024, which indicates that current investment levels amount to just 37% of the required amount. The ‘investment gap’ varies by geography and technology, with China being the closest to meeting the target, followed by Germany and the UK.
Energy transition debt totaled $1 trillion in 2024, rising 3% compared with 2023. The largest component of this was corporate debt, which increased 5%, triggered by interest rate cuts around the world. Despite these rises, project debt volumes dipped and government energy transition debt levels were stable year-on-year. Similarly to other findings, the US and mainland China are the two biggest markers for energy transition debt, with both markets growing debt sales last year.
Global Cost of Renewables Continue Falling in 2025
According to the latest report by BloombergNEF (BNEF), new wind and solar farms are already undercutting new coal and gas plants on production cost in almost every market globally. The cost of clean power technologies such as wind, solar and battery technologies are expected to fall further by 2-11% in 2025, breaking last year’s record.
Meanwhile, China’s clean technology manufacturing overcapacity has led to rising protectionism in the form of import tariffs by countries to avoid cheap imports upending their own energy markets. Although trade barriers may temporarily slow cost reductions, BNEF still projects that the levelized cost of electricity for clean technologies will decline by 22-49% by 2035.
BNEF’s Levelized Cost of Electricity report indicates that the global benchmark cost for battery storage projects fell by a third in 2024 to $104 per megawatt-hour (MWh). This drop was driven by an oversupply caused by slower electric vehicle sales, which led to lower battery pack prices.
Meanwhile, the cost of a typical fixed-axis solar farm fell by 21% globally last year. Modules were sold at or below the cost of production, with no signs of the overcapacity in the solar supply chain easing in 2025.
Batteries will cross the $100/MWh watershed in 2025, while global benchmarks for wind and solar generation are also set to fall 4% and 2%, respectively.
“New solar plants, even without subsidies, are within touching distance of new US gas plants. This is remarkable because US gas prices are only one-quarter of prevailing gas prices in Europe and Asia,” said Amar Vasdev, lead author of the report.
“This opens up the likelihood that solar will become even more compelling in the coming years, especially if the US begins exporting liquefied natural gas (LNG) and exposes its protected gas market to global price competition.”
China’s abundant clean-tech manufacturing capacity was a key driver of cost declines last year and continues to have a major impact on project economics both domestically and internationally. On average, China can generate a megawatt-hour of electricity from major power-generating technologies 11-64% cheaper than other markets.
For example, electricity from onshore wind turbines costs approximately 24% less than the global benchmark of $38 per megawatt-hour. While wind turbine prices in China have been falling, they have risen elsewhere since 2020. BNEF’s turbine price index indicates that component costs will decline again in 2025, but manufacturers are maintaining higher prices to improve profit margins.
BNEF’s Levelized Cost of Electricity, now in its sixteenth year, provides the industry standard for the cost of electricity generation, covering 29 technologies in over 50 countries.
Looking to 2035, BNEF’s global benchmark LCOEs falls 26% for onshore wind, 22% for offshore wind, 31% for fixed-axis PV and almost 50% for battery storage.
“China is exporting green energy tech so cheaply that the rest of the world is thinking about erecting barriers to protect their own industries,” said Matthias Kimmel, head of Energy Economics at BNEF.
“But the overall trend in cost reductions is so strong that nobody, not even President Trump, will be able to halt it.”
Figure: Global benchmark levelized costs of electrisity, 2024,2025 and 2035. S/MWH (real 2024)
Text: Vaula Aunola
Photos: Shutterstock
