The energy transition and renewable energies were one of the biggest drivers of growth in the global economy last year. This is demonstrated by a new analysis by the International Energy Agency (IEA). According to this report, renewable energies accounted for a total of ten percent of global gross domestic product growth, equivalent to $320 billion. Therefore, renewable energy has added more value to the global economy than the aerospace industry or an economy the size of the Czech Republic.
“A new green energy economy”
The value chain in the field of green technologies is now enormous. Whether in the production of wind turbines, batteries and solar systems, or in the expansion of electricity grids or in the sale of electric cars and heat pumps to end customers, new economic sectors have emerged everywhere. “Green energy is playing an increasingly central role in the global energy system,” the analysis says. The result is “a new green energy economy.”
In fact, the growth rates of renewables over the past year were considerable: 80 percent of added electrical capacity worldwide came from wind, solar, hydro and biomass power. Electric vehicles already represent a fifth of cars sold worldwide. And since 2021, more people have been employed in the “clean” energy sector than in the fossil sector, that is, oil, gas and coal. According to the analysis, green energies have already created 36 million jobs.
World champion in the Far East
The largest global beneficiary of the energy transition is: China. China's economy grew 5.2 percent last year, and about a fifth of this growth came from the country's green energy industry, the IEA estimates. According to the analysis, in the US, renewable energy contributed about six percent of growth. The “Inflation Reduction Act,” the Biden administration’s main investment package for green energy, played a key role.
However, the highest proportion of renewable energy in economic growth can be observed in the European Union. There, the “green economy” even accounted for a third of the growing gross domestic product. However, the European economy only grew 0.5 percent last year. According to the analysis, from a global perspective, renewable energy now contributes more to economic growth than the chemical industry.
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And experts at the International Energy Agency are also clear about where the journey is headed. Investments in the field of green energy are constantly growing. In 2023, the equivalent of €188 billion will be invested in the energy transition worldwide, an increase of 75 percent compared to the previous year. The IEA estimates that the trend will continue: so far China represents the majority of investments. But other regions are constantly catching up, including Europe.