Global Energy Investments May Soar Above $3 Trillion in 2025

Today’s ESG Updates

• IEA reports global energy investment will hit $3.3T in 2025: $2.2T in clean tech led by solar and batteries.
• UN finds tech giants’ emissions rose 150%: Significant increase in indirect emissions observed due to growth of AI data centres.
• British Gas owner signs £20B gas deal with Norway’s Equinor: Supplies 5M UK homes, with hydrogen swap option included.
• Trump budget bill cuts solar subsidies: U.S. rooftop solar installs may be reduced by 40%.

Global energy investments are projected to hit $3.3 trillion in 2025

According to a recent IEA report, global energy investments are projected to reach $3.3T in 2025 amid political tensions and economic instability. Investments in clean technologies are predicted to reach a record of $2.2T this year, while investments in fossil fuels are estimated to be $1.1T. Investment in solar PV is expected to reach $450B in 2025, leading in the global energy investment inventory, while rapidly increasing battery storage investments will soar above $65B. The report also currently identifies China as the world’s single largest investor in energy, contributing to one-third of global clean energy investments. Conversely, there are significant financial gaps for developing countries, which face challenges with mobilising capital for energy infrastructure. These predictions and findings suggest that, alongside increased efforts to reduce emissions, there are also growing concerns about energy security and industrial policies. Companies can stay informed about the latest developments using ESG tools.  

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Further reading: Global energy investment set to rise to $3.3 trillion in 2025 amid economic uncertainty and energy security concerns

UN Report reveals 150% increase of indirect emissions from tech giants

A recent report from the UN has shown that indirect carbon emissions from four leading AI-focused tech companies have risen by an average of 150% from 2020-2023. The use of AI by Amazon, Microsoft, Alphabet and Meta led to a spike in their global indirect emissions due to the large amounts of energy needed to power data centres. Comparing operational carbon emission volumes in 2023 to 2020, Amazon’s emissions had increased the most by 182%, followed by Microsoft at 155%, Meta at 145%, and Alphabet at 138%.  Following increasing investments in AI, carbon emissions from the top-emitting AI systems are projected to reach up to 102.6M tons of CO2 equivalent per year. Data centres required for AI development may place more pressure on existing energy infrastructure. Electricity use by data centres is also increasing four times faster than the overall rise in electricity consumption due to the rapid growth of AI.

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Further reading: Tech giants’ indirect emissions rose 150% in three years as AI expands, UN agency says 

British Gas strikes new £20 trillion gas deal with Norway’s state energy company 

UK’s Centrica has recently struck a £20B gas deal with Norway’s Equinor, purchasing enough gas to meet almost 10% of the UK’s needs for the next decade. Under this deal, Equinor will supply Centrica with 5 bcm of gas every year from the winter of 2025 until 2035, and this can supply approximately 5M UK homes annually. This recent deal aligns with the UK’s net-zero goals and includes a clause which allows the UK to swap gas imports for emissions-free hydrogen from Equinor’s UK hydrogen plant. The UK’s gas demand is expected to decrease sharply as it works towards a net zero economy by 2050. Currently at 720TWh, gas makes up almost 40% of the country’s primary energy demand, but it will need to fall to less than 15% by 2050 to meet its goals. Companies can keep informed about the latest sustainability deals and updates by using ESG tools.

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Further Reading: British Gas owner strikes £20bn gas deal with Norway’s state energy company

Trump’s budget bill targets solar subsidies 

Effective immediately, tax credits for homeowners with rooftop systems, coupled with the 30% tax credits for solar leasing companies that charge homeowners monthly fees, will be eliminated under Trump’s budget bill. This makes rooftop systems much less affordable for homeowners, and these changes may result in up to 40% less residential solar capacity being installed over the next 5 years. Republican backers of the bill argue that the subsidy cuts have been made to finance other industries. However, solar installers raise concerns about the consequences of undermining the subsidies, particularly for the U.S. manufacturers that supply them. Solar companies are also actively lobbying the Senate to make changes before the bill becomes law. Companies can stay updated about the latest developments and legislations by using ESG tools.

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Further reading: Trump budget bill would kill subsidies that made home solar mainstream

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit:  Golam Rob