IEA: Rising Commodity Prices a Challenge for Renewables

by | 29. Jun 2022 - 11:15 | Economy

Energy Agency presents World Energy Investment Report 2022. Overview of investments in critical commodities included for the first time.

The International Energy Agency (IEA) presented its annual World Energy Investment Report last week. The analysis covers investment and financing in all areas of fuel and power supply, as well as research and development.

According to the IEA, more money is flowing into sustainable energy after years of stagnation, with investments in the sector expected to top $1.4 trillion in 2022. The frontrunner for investment in 2021 was China, followed by the European Union and the United States.

This year’s report also includes, for the first time, an overview of investment trends in critical minerals such as copper, lithium and rare earths. According to the agency, rising commodity prices threatened the long-standing trend of falling renewable energy costs. The cause of the increase in price is a combination of rising demand, disrupted supply chains and concerns about tightening supply. As a result, prices for wind turbines rose nine percent last year, while solar installations saw a 16 percent increase.

At the same time, the IEA notes a significant increase in spending on the development of new raw material deposits. The increase of 30 percent is mainly attributable to the USA, Canada and Latin America. However, it is likely to take some time before this results in larger production volumes and thus an easing of the supply situation. In the meantime, the number of market participants is increasing, as car and battery manufacturers are also expanding their activities upstream in the value chain.

The full report can be found here

Photo: iStock/Cristian Storto Fotografia


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