The paradox of investing in renewable energy: two steps forward and one step back

The fight against climate change is being fought on a battlefield where investment in renewable energy has become the heavy artillery. The good news is that, according to the International Energy Agency (IEA), in 2024 two trillion dollars will be invested in this sector, more than double what is allocated to fossil fuels. However, the shadow of the climate crisis continues to cast itself over this progress, reminding us of the magnitude of the challenge that lies ahead.

The lower cost of clean technologies, especially photovoltaic solar energy, is driving this paradigm shift. In the last two years, solar panels have reduced their price by 30%, becoming the darling of renewables and capturing the majority of investment, even above all other clean sources. This scenario fosters a virtuous circle where investment drives innovation, which in turn lowers costs, attracting even more investment.

In general, when talking about clean energy, it refers especially to solar panels, wind turbines, new nuclear generation systems, heat pumps and electric cars. Well, very little is still invested in the possible use of hydrogen as fuel, and alternative fuels for air and maritime transport.

Governments and companies have embarked on a race against time to get on the train of clean energy. On the one hand, the need to comply with international commitments to reduce carbon emissions and, on the other, the attractiveness of a more sustainable and resilient energy model, are driving support policies and million-dollar investments.

However, despite this seemingly optimistic outlook, the reality is that we are still not doing enough. The climate crisis is advancing at a relentless pace, and the timid steps we take in the right direction are eclipsed by the inertia of an economic system dependent on fossil fuels.

While it is true that investment in renewables has become a priority, it is necessary to broaden the focus and address other critical fronts. The electrification of transport, driven by the rise of the electric car, is an important step, but let us not forget sectors such as maritime and air transport, where dependence on fossil fuels remains almost absolute. Research and development of alternative fuels, such as green hydrogen, is crucial to decarbonize these sectors and move towards a truly sustainable economy.

The energy transition is not limited to replacing one energy source with another. It requires a profound change in our production model and especially consumption. Energy efficiency, demand reduction and the commitment to the circular economy are fundamental pieces of the puzzle that we cannot ignore.

China is by far the country that is investing the most in renewable energy, but there are other countries (some emerging and some not) that are not able to invest as much as they need, and will be left behind in meeting their future demands for renewable energy.

In short, the record investment in renewable energies is excellent news that fills us with hope, but we cannot fall into complacency. The path to a sustainable future is long and complex, and requires an unprecedented collective effort.

We must redouble our commitment to innovation, collaboration and decisive action to reverse the current course and build a prosperous future for future generations. The climate crisis requires us to act with urgency and determination, not just optimism.

But the “challenge” of the Climate Crisis is still ahead, and it is not at all clear that we will be able to meet it.