BLOOMBERG NEF ENERGY INVESTMENT TRENDS REPORT

Contributed by Robert Lyman © 2025. Robert Lyman’s bio can be read here.

EXECUTIVE SUMMARY

On January 30, 2025 Bloomberg NEF issued its annual report on the global energy “transition” trends. It implicitly defined the energy transition as one that concerns investment in certain politically-favoured sectors of the global energy industry. In this article, I will summarize and comment on the main findings in the Bloomberg NEF report.

Investment in the transition energy sources surpassed USD 2 trillion in 2024, after having more than doubled from USD 929 billion in 2020. Most of that growth occurred from 2020 to 2023; the increase in 2024 was USD 202 billion, or 10.7% over 2023. By far the largest sectors are electrified transport at USD 757 billion, renewable energy at USD 728 billion and power grids at USD 390 billion. These three sectors constituted 90 per cent of the global investment.

Investment in nuclear energy, carbon capture and storage, hydrogen, clean shipping, clean industry, and electrified heat actually declined by 24 per cent in 2024.

Investment in the transition energy sources in the Asia-Pacific region exceeded USD 1 trillion in 2024. China alone accounted for 24 per cent of the global increase, investing USD 818 billion in 2024. US investment was stable at USD 338 Billion, while EU and UK investment fell.

Climate-tech companies raised USD 50.7 billion in private and public equity in 2024, down 40 per cent from 2023, and marking the third straight year of contraction from a high of USD 168 billion in 2021. Of these, clean power and transport companies led, bringing in USD 31.8 billion.

Transition debt issuance totaled USD 1 trillion in 2024, up just 3 per cent from 2023, as interest rates were cut across the world. Utilities are the largest fundraisers, with governments and financial markets following as they subsidize, invest in or lend to the value chain.

The Bloomberg NEF report observes that “ a clear distinction” is developing between sectors where the technology is proven, commercially scalable and the business models established and those where the economics are yet to “stack up” or the technology is yet to be proven at scale. Mature technologies allegedly include renewables, energy storage, electric vehicles and power plants, which together accounted for USD $1.93 trillion of investment in 2014. In contrast, “emerging” technologies include electrified heat, hydrogen, CCS, nuclear, clean industry and clean shipping. They accounted for only USD 154 billion in investment in 2024, or 7 per cent of the total. Bloomberg NEF observes that “Government policy makers and the private sector have to do more to de-risk these technologies if they are to scale up in time to have any meaningful impact on emissions by the end of the decade.” The Blomberg NEF report acknowledges that the rate of annual global investment is running at just 37 per cent of the levels it considers as “required” for the rest of the decade if the world is to get on track for net zero by 2050.

The report also concludes that energy transition investment still falls short of what is required to reach net zero by 2050. It asserts that annual global spending on “clean energy” would need to average USD 5.6 trillion between 2025 and 2030, an increase of 168 per cent from 2024’s figure. It considers electrified transport to constitute the largest portion of the investment “gap”; that is, the difference between the current and required investment figures until 2030. Spending for the sector would need to quadruple to hit USD 3 trillion per year for the rest of this decade and investment in renewable energy and power grids would need to rise by 58 per cent together from current levels.

After 2030, the challenge increases. Bloomberg NEF estimates that the annual spending on “clean energy” from 2031 to 2035 would need to increase to USD 7.6 trillion.