Global investments in energy transition technologies – including energy efficiency technologies – reached $1.3-trillion in 2022, a new report, ‘Global Landscape of Renewable Energy Finance 2023’, published by the International Renewable Energy Agency (Irena) and Climate Policy Initiative (CPI), shows.

This figure was a new record high, up 19% from 2021 investment levels and 50% higher compared with investment levels before the pandemic in 2019.

The report finds that, although global investments in renewable energy reached a record high of $500-billion in 2022, this figure still represents less than 40% of the average investments needed each year between 2021 and 2030, according to Irena’s 1.5 ºC scenario.

Investments are also not on track to achieve the goals set under the 2030 Agenda for Sustainable Development, the report notes.

Since decentralised solutions are vital in plugging the access gap to reach universal energy access to improve livelihoods and welfare under the 2030 Agenda, efforts must be made to scale up investments in the off-grid renewables sector, the reportoutlines.

It says that, despite reaching record-high yearly investments exceeding $500-million in 2021, investments in off-grid renewable solutions fall far short of the $2.3-billion needed yearly in the sector between 2021 and 2030.

Moreover, investments are said to have become concentrated in specific technologies and uses.

In 2020, solar photovoltaic alone attracted 43% of the total investment in renewables, followed by onshore and offshore wind at 35% and 12% respectively. Based on preliminary figures, this concentration seems to have continued in 2022.

To best support the energy transition, more funds need to flow to less mature technologies as well as to other sectors beyond electricity such as heating, cool ing and system integration, the report emphasises.

Comparing renewables finan cing across countries and regions, the report shows that considerable disparities have increased significantly over the last six years.

About 70% of the world’s population, mostly residing in developing and emerging countries, received only 15% of global investments in 2020. Sub-Saharan Africa, for example, received less than 1.5% of the amount invested globally between 2000 and 2020.

In 2021, investment per capita in Europe was 127 times that in sub-Saharan Africa, and 179 times more in North America.

The report emphasises how lending to developing countries looking to deploy renewables must be reformed and highlights the need for public financing to play a much stronger role, beyond mitigating investment risks.

Recognising the limited public funds available in the developing world, the report calls for stronger international collaboration, including a substantial increase in financial flows from the Global North to the Global South.

“For the energy transition to improve lives and livelihoods, governments and development partners need to ensure a more equitable flow of finance, by recognising the different contexts and needs.

“This joint report underscores the need to direct public funds to regions and countries with a lot of untapped renewables potential but which find it difficult to attract investment. International cooperation must aim at directing these funds to enabling policy frameworks, the development of energy transition infrastructure, and to address persistent socioeconomic gaps,” says Irena director-general Francesco La Camera.

Achieving an energy transition in line with the 1.5 °C scenario also requires the redirection of $700-billion a year from fossil fuels to energy-transition-related technologies, the report states.

However, following a brief decline in 2020 owing to Covid-19, fossil fuel investments are now on the rise.