Global energy investment is projected to reach an all-time high of $3.3 trillion in 2025, with clean energy initiatives making up the bulk of the spending, according to the International Energy Agency (IEA). Despite ongoing geopolitical tensions and economic uncertainty, the transition toward sustainable energy is gaining momentum.

In its latest World Energy Investment report, the IEA revealed that $2.2 trillion—nearly two-thirds of the total—will be funneled into clean energy sectors such as renewables, nuclear power, and energy storage. This is more than double the investment expected for fossil fuels, marking a significant shift in global energy priorities.

IEA Executive Director Fatih Birol acknowledged that while economic and trade challenges are prompting some investors to delay decisions on new projects, existing clean energy developments remain largely on track. “The fast-evolving global landscape has made some investors cautious, but most ongoing projects are progressing without major disruption,” Birol said.

Solar energy is set to lead the charge, attracting an estimated $450 billion in investment next year. Battery storage—crucial for balancing the variable output of renewable sources like wind and solar—is also expected to see a sharp rise, with spending forecast to climb to $66 billion.

While solar and storage surge ahead, fossil fuel investment is expected to decline. The IEA projects upstream oil investment will fall by 6% in 2025, marking the first drop since the pandemic-induced slump of 2020. This decline is attributed to falling oil prices and weaker demand outlooks.

The report also flags a growing concern: underinvestment in power grid infrastructure. Although approximately $400 billion is being spent annually on grids, this lags behind generation and electrification efforts. The IEA warns that without a significant increase in grid funding—brought closer in line with generation investment—electricity reliability could be compromised in the future.

Grid expansion is being hampered by bureaucratic hurdles and supply chain issues, particularly in the availability of critical components like transformers and cables.

Investment trends remain uneven across the globe. While developing nations continue to face challenges in financing energy infrastructure, China stands out, accounting for nearly one-third of the world’s total clean energy investment.

As the world edges closer to critical climate deadlines, the IEA’s figures highlight both the progress and the persistent gaps in building a sustainable and resilient global energy system.