This is an abridged version of the report available to non-subscribers.

BNEF subscribers can find the

full version on the client website and on the Bloomberg Terminal. Contact us for more information.

Executive summary
This report is BloombergNEF’s annual accounting of global investment in
the low-carbon energy transition. It includes a wide scope of sectors,
covering renewables, energy storage, electrified vehicles and heating, $1.11 trillion Global energy transition
investment in 2022
hydrogen, nuclear, sustainable materials and carbon capture. It also
covers VC/PE and public markets investment in climate-tech companies,
For the first time this year, we also track power grid investment, and supply 31% 2021-2022 increase in energy
transition investment
chain & manufacturing investment for clean energy technologies.
Increase in investment levels
● In 2022, global energy transition investment totaled $1.1 trillion, up 31%
on the prior year and the first time the figure has been measured in 3x needed to get on track for net
zero
trillions. This figure includes investment in projects, such as renewables,
storage, charging infrastructure, hydrogen production, nuclear, recycling Global energy transition investment by sector
and CCS – as well as end-user purchases of low-carbon energy tech, $ billion
such as small-scale solar, heat pumps and zero-emission vehicles. 1,200
Sustainable materials
● While renewable energy remained the largest sector at $495 billion (up
17% year-on-year), electrified transport is growing much faster and hit 1,000 Electrified heat
$466 billion (up 54%).
800 Electrified transport
● China is by far the largest contributor, accounting for just under half of
global energy transition investment. The US is a distant second. Hydrogen
600
● Energy transition investment is on the brink of overtaking fossil fuel CCS
investment for the first time. Both are estimated at $1.1 trillion in 2022. 400
Energy storage
But transition investment needs to average more than 3x this level, for
the rest of this decade, to get on track for BNEF’s Net Zero Scenario. 200 Nuclear

● Climate-tech companies raised a total of $119 billion from global public Renewable energy
0
equity markets and private investors in 2022 – down 29% from the year 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
before during a challenging year in the markets.
Source: BloombergNEF. Note: start-years differ by sector but all sectors are
● Investment in clean energy manufacturing facilities grew to $79 billion in
present from 2019 onward; see Appendix for more detail. Nuclear figures start in
2022. No significant acceleration is needed to get on track for net zero. 2015.

1 Energy Transition Investment Trends 2023

Authors

Energy transition investment trends Sectoral and thematic contributions

Albert Cheung Allen Tom Abraham (electrified transport)
Miko Tan Meredith Annex (renewable energy)
Julia Attwood (sustainable materials)
Climate-tech corporate finance Corey Cantor (electrified transport)
Mark Daly Brenna Casey (carbon capture & storage)
Sarrah Raza Ryan Fisher (electrified transport)
Chris Gadomski (nuclear)

Supply chain & manufacturing investment Kyle Harrison (sustainable finance)

Antoine Vagneur-Jones Luxi Hong (oil & gas)

Leo Wang Matthias Kimmel (net zero)

Yali Jiang Claudio Lubis (net zero and fossil fuels)

Evelina Stoikou Pietro Radoia (secondary markets)

Youru Tan Sanjeet Sanghera (grids)

Nikolas Soulopoulos (electrified transport)
Yayoi Sekine (energy storage)
Martin Tengler (hydrogen)
Lewis Williams (electrified heat)

2 Energy Transition Investment Trends 2023

Understanding this report

Energy transition investment Climate-tech corporate finance Supply chain & manufacturing
investment
The first two sections of this report cover The third and fourth sections of this report The fifth section of this report covers
‘energy transition investment’, our term for cover the raising of capital by ‘climate-tech’ investment into the construction of
money spent to deploy clean technologies companies, either via public equity markets manufacturing facilities for clean energy
such as clean energy, electric vehicles, heat or venture capital / private equity. technologies. These sums are critically
pumps, hydrogen and carbon capture. In a word, these sections focus on funding important to ensure that supply of needed
In a word, these sections focus on funding for innovation and scale-up. components and systems for the energy
for deployment, across both the supply and transition keeps up with the pace of
The scope includes technologies and deployment.
end-use of energy. business models to decarbonize the energy,
In 2022, manufacturing investment
With data going back as far as 2004, we transport, buildings & infrastructure, industry
totaled $79 billion.
track each of these sectors as much as and agriculture sectors, or help better
possible from a bottom-up perspective, understand our planet and environment,
giving the most robust estimate available of assist in tracking greenhouse gas emissions,
Thematic highlights
investment in the deployment of net-zero and mobilize financial (and consumer) The last section of this report covers notable
aligned technologies. markets toward greener investments. narratives from the world of climate and
energy transition finance over the last year,
In 2022, global energy transition Comprehensive data in this section only such as:
investment totaled $1.1 trillion. begin in 2021, though we do have corporate
finance data for renewable energy and ● Public market performance of clean
An additional $274 billion was invested into energy equities
storage going back to 2004 (in the separate
power grids.
Renewable Energy Investment Tracker). ● The rise of sustainable debt and ESG-
Where to find the data themed ETFs
In 2022, global climate-tech corporate
The underlying data for energy transition finance totaled $119 billion. ● Investment in clean energy from oil & gas
investment can be found here: companies
Where to find the data
https://www.bnef.com/interactive- ● Secondary transactions of renewable
Our Investment Radar provides the latest
datasets/2d5d59acd9000005 energy plants
update on climate-tech investment trends.

3 Energy Transition Investment Trends 2023

Overall, BNEF tracked $1.6 trillion in investment
flows relating to the low-carbon transition in 2022
● This report tracks a variety of flavors of
Total 2022 investments across categories covered in this report investment in the low-carbon transition.
● Global energy transition investment, our
$ billion measure of money spent to deploy low-carbon
Corporate finance energy technologies, hit $1.1 trillion in 2022 –
1,200
1,110 SPAC the first time this figure has exceeded $1 trillion.

Non-SPAC PIPE ● BNEF also tracked $274 billion in power grid

investment, which we have kept as a standalone
1,000 Secondary offering category. Power grid investment is a key enabler
IPO for the net-zero transition.

800 VCPE ● For the first time, we have included investment

in supply chain / manufacturing facilities as a
Grids
Other categories new category. We tracked $79 billion in clean
Sustainable materials energy factory investment in 2022.
600
Electrified heat ● Finally, climate-tech companies raised $119
billion in equity financing from public markets
Electrified transport and private investors in 2022.
400
274 Hydrogen ● There may be some limited double-counting
CCS between the corporate finance total and the
200 other three columns, as companies can in
119 Energy storage principle raise equity and then use those
79
Nuclear proceeds to fund technology deployment, grid
0 expansion or factory construction. In practice
Renewable energy this overlap is probably small.
Energy Power grids Supply chain & Climate-tech
transition manufacturing corporate ● The total across these categories stands at $1.6
investment finance
trillion in investment flows in 2022. Each
category is discussed in the following chapters.
Source: BloombergNEF

4 Energy Transition Investment Trends 2023

Table of Contents is for the full version of the report

Table of contents

Energy transition investment: overview 6

Energy transition investment: sectoral findings 19

Climate-tech corporate finance: overview 36

Climate-tech corporate finance: sectoral findings 45

Supply chain & manufacturing investment 52

Thematic highlights 60

Methodology: energy transition investment 67

5 Energy Transition Investment Trends 2023

Energy transition
investment: overview
Top-level findings

6 Energy Transition Investment Trends 2023

Energy transition investment: overview

Energy transition investment: preface For interactive data,

click here.

This section presents our top-level findings on global investment in the Coverage
low-carbon energy transition.
The sectors covered are:
Brief definition and methodology ● Renewable energy: wind (on- and offshore), solar (large- and
The figures in this section represent capital spent on deployment of small-scale), biofuels, biomass & waste, marine, geothermal and
low-carbon technology. This largely excludes capital invested in small hydro
companies (see next section for that), and money spent on research, ● Energy storage: stationary storage projects (large- and small-
development and manufacturing (with an exception for CCS, where we scale), excluding pumped hydro, compressed air and hydrogen. The
include some of these sums). majority are battery projects.
For large infrastructure projects such as renewables, stationary energy ● Nuclear power: reactors under construction and major
storage, hydrogen production, EV charging, CCS, nuclear and refurbishments
sustainable materials, our figures are built based on bottom-up
intelligence on individual projects and financial commitments. In ● Hydrogen: hydrogen electrolyzer projects, thermochemical
general, we account for money that has been committed to a specific hydrogen production, pipelines and underground storage
project, whether through a final investment decision, a government ● Carbon capture and storage (CCS): large- and small-scale
grant allocation, or a project proceeding to construction and commercial CCS projects, dedicated transport and storage
commissioning. We don’t include money that hasn’t been explicitly
committed to a known project (such as unallocated government grant ● Electrified transport: sales of electric cars, commercial vehicles
funding), or projects that have not yet reached final investment and buses, as well as home and public charging investments. We
decision. We apply cost estimates where project values are not also include hydrogen fuel cell vehicles and refuelling stations in this
disclosed. category.

For consumer- or end-user-led technologies, such as small-scale solar, ● Electrified heat: residential heat pump investments
heat pumps, and electric and fuel cell vehicles, we estimate the total ● Sustainable materials: circular economy (recycling) and bioplastics
amount invested (spent) based on our own benchmarks of the total
These sectors encompass a broad range of low-carbon technologies
costs of these products, including any relevant installation costs.
and are a good representation of global energy transition investment.
More information on our methodology for each sector is available at the Energy efficiency is not covered, and grid investment is treated
end of this report. separately. The totals here can therefore be thought of as a
conservative estimate of global energy transition investment.

7 Energy Transition Investment Trends 2023

Energy transition investment: overview

Energy transition investment ● Annual global investment in energy transition

technologies has exceeded $1 trillion for the
surged past $1 trillion in 2022 first time, hitting a new record level of $1.11
trillion in 2022 and recording a 31% yearly gain.
● Renewable energy, which includes wind, solar,
Global investment in energy transition by sector
biofuels and other renewables, narrowly
$ billion retained its position as the largest sector and
achieved a new record of $495 billion in new
1,200 project investments.
1,110
Sustainable
● Electrified transport, which tracks spending on
materials
electric vehicles (EVs) and charging
1,000 Energy infrastructure, is now a very close second. The
Electrified heat
demand sector grew to $466 billion (up 54%) as the EV
849
market continued to accelerate globally.
800 Electrified
transport ● With the exception of nuclear power, which has
been flat in recent years, all other sectors also
626 Hydrogen saw record levels of investment:
600
522 – Electrified heat saw $64 billion in funding
468482 – Sustainable materials grew to $30 billion
CCS
422
394 – Energy storage surged to $15.7 billion
400
310 Energy storage Energy – Carbon capture and storage hit $6.4 billion
267
241 supply – Hydrogen was the smallest sector at just
213 211
200 155152
$1.1 billion but grew the fastest, more than
Nuclear
120 tripling investment year-on-year.
79
32 50 ● Growing policy support and the increasing
Renewable competitiveness of clean energy technologies
0 energy
continues to underpin a rapid acceleration in
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

the energy transition. While supply chain

disruption and inflation have posed challenges,
Source: BloombergNEF. Note: start-years differ by sector but all sectors are present from 2019 onwards; see
they do not appear to have put a meaningful
Appendix for more detail. Nuclear figures start in 2015. dent in the speed of the transition.

8 Energy Transition Investment Trends 2023

Energy transition investment: overview

Demand-side investment outweighs the

supply-side
Investment comparison: supply-side versus demand-side in 2022 ● Demand-side investment in energy
$ billion Energy supply transition technologies now outweighs the
Renewable energy supply side.
Energy Nuclear ● In our ‘energy demand’ category, we include
561 Energy storage
demand electrification of heat and transport, as well
CCS as the sustainable materials sector (circular
Hydrogen economy and bioplastics). These
Energy
Energy supply
demand technologies attracted $561 billion in
Energy Electrified transport
550 investment in 2022, with electrified transport
supply
Electrified heat
being by far the largest contributor.
Sustainable materials
Energy demand ● Our ‘energy supply’ category includes all
0 200 400 600
clean energy production technologies, as
Global energy transition investment by supply / demand split well as storage, hydrogen and carbon
capture. These sectors collectively received
$ billion
$550 billion in new project investments in
1,200 1,110 2022.
1,000 ● The ‘supply’ category also includes some
849
800 small-scale technologies, like rooftop solar
626
Energy demand and behind-the-meter battery storage, which
600 522 are typically funded by end-users and would
468 482
394 422
400 310 Energy supply
further boost the ‘energy demand’ total if
267 241
213 211 they were considered demand-side
155 152
200 79 120 investments.
32 50
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

Source: BloombergNEF. Note: for this chart, we define ‘energy demand’ as the categories where energy users are
likely to have committed the capital, or where the technology is mainly energy-consuming (not producing).

9 Energy Transition Investment Trends 2023

Energy transition investment: overview

China extended its lead over other

countries, the UK dropped a place ● China’s energy transition spending hit
$546 billion in 2021 – just shy of half the
world’s total. Its lead over the US and
other countries has grown as its
Top 10 countries for energy transition investment, 2022 renewable energy and electric vehicles
sectors have ramped up. The country’s
$ billion investments in steel recycling (captured
under sustainable materials) also
contribute meaningfully to the total.
China 546
● The US remains the second-largest
United States 141 funding destination for energy transition
technologies, with a total of $141 billion in
Germany 55
2022 – up 11% from 2021. New climate
legislation in the US is expected to drive a
Renewable energy rapid acceleration in the coming years.
1 France 29
Nuclear ● However, the EU (not shown in chart)
1 United Kingdom 28 Energy storage would be in second place ahead of the
CCS
US if treated as a single bloc, posting
$180 billion in new investment in 2022.
Japan 23 Hydrogen
Electrified transport ● Germany has retained its third position,
Korea (Republic) 19 largely thanks to a growing EV market
Electrified heat
that made up for a slowdown in
Sustainable materials renewables.
India 17
● Investment in France ticked up slightly in
1 Spain 17 2022, but the UK’s figures fell by about
20% thanks to a drop in offshore wind
deals, dropping it to fifth in the table.
1 Italy 16
● Japan, South Korea and India each
retained their places in the top 10, while
Spain and Italy gained a place each.
Source: BloombergNEF

10 Energy Transition Investment Trends 2023

Energy transition investment: overview

Global energy transition investment has

matched fossil fuels for the first time For the first time, energy transition
investment has caught up with fossil fuels
●

investment in 2022. This came despite an

uptick in spending for the latter as many
Investment comparison: energy transition versus fossil fuels regions focused their attentions on shoring
$ billions up energy security.
1,200 ● In 2022, energy transition investment
1,110 1,110 summed to $1.1 trillion, growing by $261
billion from the previous year. Fossil fuels
1,000 spend was at the same level, based on our
930 922 estimates (with IEA data as an input), and
896
849 up $214 billion against 2021 levels.
561 ● The energy transition and fossil figures
800
745
were arrived at independently. Future
626 revisions of both estimates may affect this
382 Energy demand
600
fine balance.
Energy supply
522 ● The growth in fossil fuel investments in
482 222 Fossil fuels
2022 occurred against the backdrop of
169 high commodity prices, with many oil and
400 163
gas majors earning record profits.
550 Increased climate awareness has however
467 made these companies more focused on
200 404
318 353 share buybacks and diversifying to lower-
carbon assets.

0 ● The shift in investment towards clean

ETI FF ETI FF ETI FF ETI FF ETI FF energy is a historic change that is unlikely
to be reversed, as low-carbon industries
2018 2019 2020 2021 2022
continue to grow. However, it should be
Source: BloombergNEF, IEA. Note: ETI stands for Energy transition investment. FF stands for Fossil fuels. 2018-
noted that clean energy supply
21 FF values were derived from the IEA World Energy Investment 2022 report. 2022 fossil fuel investments are investments on their own are not yet a
BNEF estimates, and include upstream, midstream, downstream sectors and unabated fossil power generation. match for fossil fuels.

11 Energy Transition Investment Trends 2023

Energy transition investment: overview

Investment must triple for the rest of

the 2020s to get on track for net zero
● To get on track for global net zero, according
to our New Energy Outlook, energy transition
and grid investment need to average $4.55
trillion between 2023 and 2030. This is more
Comparison: 2022 energy transition and grid investment versus required annual than three times the total spent in 2022.
investment in 2023-30, 2031-40, and 2041-50 in NEO 2022 Net Zero Scenario ● Across 2023-30, electrified transport,
$ billion (2022) renewable energy and grids form the largest
9,000 energy transition investment opportunities,
accounting for 72% of the share combined at
7,866 $1.47 trillion, $1.18 trillion and $630 billion
8,000
per year, respectively. Increased co-
+983 operation between the public and private
6,883
7,000 sectors will be needed to mobilize capital
CCS towards these sectors in the near term.
6,000 Electricity grids ● In the 2030s, annual investment ticks up to
+2,333
Electrified heat $6.88 trillion. The investment opportunity to
5,000 electrify mobility demand expands to $3.91
4,550 Electrified transport
trillion per year, while spending in renewable
Energy storage energy and electricity grids combined
4,000
Hydrogen accounts for 26% of the overall share at
Nuclear $1.88 trillion per year.
3,000 +3,166
Renewable energy ● By the 2040s, annual energy transition
Sustainable materials investment requirements totals $7.87 trillion,
2,000
1,384 almost six times the 2022 levels. Electrified
transport forms the lion’s share, followed by
1,000 grids and renewable energy.
● The topic of Paris-aligned investment
0 requirements is further explored in our earlier
2022 2023-30 2031-30 2041-50
report, Investment Requirements of a Low-
Source: BloombergNEF. Note: future values are from the New Energy Outlook 2022, except electrified transport, Carbon World: Energy Supply Investment
which is from the Electric Vehicle Outlook 2021 Net-Zero Scenario. The Net-Zero Scenario target global net zero Ratios
by 2050 in line with 1.77 degrees Celsius of warming. Investment includes electricity grids.

12 Energy Transition Investment Trends 2023

Climate-tech
corporate finance:
overview
Venture capital, private equity and public
markets investment for the climate
transition

13 Energy Transition Investment Trends 2023

Climate-tech corporate finance: overview

Climate-tech corporate finance: preface

What is this section? Methodology

As asset investment in the energy transition grows, The data for this section has come from a variety of sources: the Bloomberg Terminal,
companies providing low-carbon products and Bloomberg proprietary datasets, PitchBook and public news announcements. In this
services must raise capital to scale up and meet analysis, we only use disclosed deal values, and do not make estimates for undisclosed
demand. This section of the report tracks all forms of deals.
equity financing for climate-tech companies. It This year, rather than tagging each deal as relevant to only one sector, deals are now
analyzes which sectors and markets have raised the tagged to multiple sectors and subsectors if a single application for an application-
most equity funding in 2022, and what kinds of capital neutral technology cannot be determined. Energy storage companies are the most
each sector is raising. common example of this as they have both power-system and transport applications.
This year, this section also tracks funding at a Funding is evenly distributed between tagged sectors.
subsector level, showing with greater resolution which
technologies and business models are attracting the Examples of technologies in the different sectors
most interest from equity investors. The data in this
section does not include mergers and acquisitions or Mega-sector Examples
debt funding. Lithium-ion batteries, electric-vehicle charging and manufacturing,
Transport
ride hailing, micromobility, low-carbon aviation and shipping
Definition of sectors
Clean-energy equipment manufacturers, renewable-power
Energy
BNEF defines “climate tech” as technologies and developers, hydrogen, biofuels, grid technology
business models that act to decarbonize six sectors:
Agriculture Precision agriculture, indoor farming, alternative proteins
energy, transport, industry, agriculture, buildings
and climate and carbon. The climate and carbon Mining of energy-transition metals, low-carbon chemicals, metals
Industry
sector includes products and services that track or and cement
model the climate or the emissions footprint of Insulation, energy-efficiency systems, heat pumps, waste-heat
businesses, companies that operate in carbon Buildings
reuse, district heating and cooling
offsetting, and companies operating in carbon
Climate and Carbon removal, carbon transport and storage, carbon offsetting,
removal, transport and storage.
carbon climate-monitoring technology

14 Energy Transition Investment Trends 2023

Climate-tech corporate finance: overview

What types of financing are covered in

this section of the report?
Private financing ● Secondary offering: A secondary offering is the sale of new or
closely-held shares by a company that has already made an initial
Funds raised by privately-owned, earlier-stage companies, in exchange public offering.
for company equity. This portion of funding is referred to as venture
capital and private equity (VC/PE) funding throughout the report. BNEF ● PIPE (private investment in public entity): A private investment
does not distinguish between venture capital and private equity firm's, fund's or other qualified investor’s purchase of stock in a
investments. This data also includes convertible debt funding . The public company at a discount to the current market value per share
investors can be government, accelerators, incubators, private for the purpose of raising capital. PIPE can also be raised by private
individuals, sovereign-wealth funds, VC/PE firms, corporates or banks. companies that are about to go public.

Public financing
Funds raised by publicly-quoted or over-the-counter pure-play Overlap with other sections of this report
companies on the capital markets. This may be through IPOs, SPACs This section tracks equity financing raised by companies in the climate-
or follow-on offerings like secondary offerings or PIPE. tech space. In principle, these funds could then be invested by those
● Initial public offering (IPO): The first sale of stock by a private companies into energy transition project deployment, such as
company to the public. IPOs are often issued by smaller, younger renewable projects or EV charging networks. If that were the case,
companies seeking the capital to expand, but can also be done by then those funds would also show up in the ‘energy transition
large privately-owned companies looking to become publicly traded. investment’ section of this report.
● SPAC reverse mergers: A publicly-traded blank check company Similarly, if these companies invested their fundraising proceeds into
(special purpose acquisition company, SPAC) raises investment factories or supply chain expansion, those figures might show up in the
funds in the form of blind pool money through an initial public ‘supply chain & manufacturing investment’ section of this report
offering (IPO). The purpose is to complete an acquisition of an (depending on the sector coverage).
existing private company, sometimes in a specified target industry. Therefore, there is some possibility of double-counting and these
When a target has been identified, the target raises equity through a figures should not necessarily be thought of as ‘additive’ to other
PIPE (see below) before reverse merging with the SPAC and sections of this report.
acquiring the cash in trust.

15 Energy Transition Investment Trends 2023

Climate-tech corporate finance: overview

Summary: climate-tech corporate finance

down 29% as public offerings decline
Climate-tech corporate finance by financing type and sector Climate-tech companies raised $119 billion in 2022,
a 29% decline on the year before.
By financing type By sector
Funding ($ billion) Funding ($ billion) Buildings With a challenging backdrop in the public markets
SPAC throughout 2022, it was the steep decline across all
Climate and carbon
Non-SPAC PIPE 180 types of public equity financing that drove the drop
180 Agriculture
168.0 Secondary offering 168.0 in headline numbers (left chart).
IPO Industry Funding raised through reverse mergers with
150
VCPE
150 Transport special purpose acquisition companies (SPACs)
declined 75%, the biggest drop in any kind of
Energy
financing.
119.3 119.3 VC/PE investment was the only type of funding
120 120
tracked by BNEF that did not decline, with a small
increase of 3%, as appetite for private opportunities
in climate tech held strong.
90 90
The energy and transport sectors attracted more
than 80% of total climate-tech funding for the
60 60
second year running, but had the biggest dollar
value declines. Agriculture had the biggest
percentage decrease in funding at 65%, while low-
carbon buildings – the least funded sector – was the
30 30 only sector to see an increase in overall funding.
Companies located in Mainland China attracted the
most funding of any market due to its strength in
0 0
clean-energy-equipment and electric-vehicle
2021 2022 2021 2022
manufacturing. The US ranked second in total but
Source: BloombergNEF, PitchBook. Note: SPAC stands for ‘special purpose acquisition company’. PIPE first in VC/PE funding.
stands for ‘private investment in public equity’.

16 Energy Transition Investment Trends 2023

Supply chain &
manufacturing
investment
Investments in factories producing wind,
solar, battery and hydrogen equipment

17 Energy Transition Investment Trends 2023

Supply chain & manufacturing investment

Supply chain and manufacturing

investment: preface
This section presents our findings on global investment in the We do not account for retirements or retrofits, and assume that future
manufacturing facilities underpinning the low-carbon energy transition. capacity tracks global demand under either NEO scenario. For some
years, no new factories of a certain type are required.
The figures in this section represent the capital spent on building the
factories that manufacture low-carbon technologies. This only tracks Sector coverage
spending on the factories themselves, and therefore excludes the
The data captures investment required for factories that manufacture
operational expenses required to produce clean energy equipment.
the following components and systems:
Our approach ● Lithium-ion batteries: separators, electrolytes, anodes, cathodes
For each sector, we show historical spending over 2018-22 and and battery cells. These serve both the electric-vehicle and
compare this to future spending required to meet global clean stationary energy storage markets
technology demand under two scenarios modeled by BNEF’s New
● Solar: polysilicon, ingots and wafers (taken together, as the two are
Energy Outlook (NEO): the Economic Transition Scenario and Net-
typically produced in the same facility), modules and cells
Zero Scenario. The forward-looking estimates are for spending over
2023-30. ● Wind: nacelles and blades

For historical capacity additions, we rely on our proprietary, sector- ● Hydrogen: electrolyzers, which produce hydrogen from electricity
specific datasets tracking factory additions. To arrive at our investment These sectors encompass the bulk of low-carbon factory investment
figures, we use top-down factory capex estimates rather than bottom- other than for electric vehicles, which are often produced in existing
up intelligence per facility. Region or country-specific benchmarks (eg vehicle factories. They are therefore a good representation of global
in $/MW/year) are used for historical spending, whereas a weighted energy transition investment. There are, however, areas that we have
global benchmark is applied for future investments (thereby avoiding not yet included – such as various segments of the wind supply chain.
taking a view on where factories will be brought online). These
benchmarks are held constant over the measured periods. The totals here can therefore be thought of as a conservative estimate
of global investment in energy transition supply chains.
We use the year in which a factory was commissioned as a proxy for
that in which the related investment was made. Actual lead times vary
by region and whether a project is brown or greenfield. Historical
capacity is of the nameplate variety, based on company announcement
(and not derisked). As such, actual operational capacity is likely to be
slightly lower than our investment numbers imply.

18 Energy Transition Investment Trends 2023

Supply chain & manufacturing investment

Batteries and China dominate new factory

spending as global additions surge
Clean energy factory investment by technology, 2018-22 ● Investment in clean-technology factories is rising fast,
hitting $78.7 billion in 2022. This figure represents a four-
$ billion
fold increase since 2018 and a jump of 44% year-on-year.
100
78.7 ● Battery-related factory spending is growing at pace and
80 Electrolyzers now attracts more investment than other clean-tech sectors
52.6 Onshore wind at $45.4 billion in 2022. Facilities to produce lithium-ion
60 battery components accounted for about 58% of facilities
Offshore wind
40 31.3 opened in 2022.
23.9 Solar
18.0 ● Solar continues to attract significant manufacturing
20 Batteries
investment at $23.9 billion in 2022, while wind is showing
0 robust growth with investment up by a third year-on-year.
2018 2019 2020 2021 2022 ● Despite the considerable attention given to supply-chain
Source: BloombergNEF. Note: Sectors include upstream inputs and components, such diversification in recent years, the regional picture has
as polysilicon for PV and anodes for batteries. No electrolyzer investment recorded barely budged. China accounted for 91% of investments in
before 2022. Solar investment for 2022 may have missed new capacity late in the year. 2022, up from an average of 79% over 2018-21.
● Some other regions saw a strong expansion in factory
Clean energy factory investment by geography, 2018-22
investment in 2022. Spending in North America, driven by
$ billion the US, grew by 40%, although spending in Europe was
RoW down from a bumper year of battery investments in 2021.
100%
East Asia (ex. China) ● Growth in North America could be boosted by the Inflation
75% North America Reduction Act, which provides incentives for manufacturing
South-East Asia in the US and North America. Similar efforts are afoot in
50%
other geographies such as India and Europe, though talk of
Europe
25% an EU “Net-Zero Industry Act” is still in its earliest stages.
China
0%
2018 2019 2020 2021 2022
Source: BloombergNEF. Note: Does not include wind.

19 Energy Transition Investment Trends 2023

Supply chain & manufacturing investment

Net-zero requires thrice the factory

investment of a least-cost transition
● New factories will be required to meet clean energy
Clean energy factory investment by scenario, 2023-30
demand under BNEF’s New Energy Outlook. But the
$ billion picture varies according to whether the transition is
modelled at lowest cost – the Economic Transition
140 Scenario (ETS) – or must solve for net-zero by 2050 –
125 the Net-Zero Scenario (NZS).
120 ● Achieving net-zero by 2050 requires a good deal of
factory investment. By 2027-30, yearly NZS factory
spending totals three times that of the ETS. Yet in the
100
short-term, existing manufacturing capacity is sufficient
79 to meet the bulk of demand for solar and, surprisingly,
80 Electrolyzers electrolyzers.
Offshore wind ● Yearly factory spending will eventually have to step up to
60 Onshore wind meet clean power demand, but existing facilities mean
there is not an immediate need for the investment
Solar volumes seen in 2022. Under the more ambitious NZS,
37 35
40 Batteries annual investment needs would only rival last year’s
levels toward the latter half of this decade. Meanwhile,
20 16 enough solar and electrolyzer production capacity has
been built to obviate the need for new factories under
the ETS.
0
● Future factory investment will likely overshoot these
2022 2023-26 2027-30 2023-26 2027-30
scenarios. They do not, for instance, account for the
Actual Yearly - ETS Yearly - NZS duplication of supply chains – an inevitability as policies
prioritize resilience and job creation. The world’s battery
Source: BloombergNEF. Note: ETS = Economic Transition Scenario. NZS = Net Zero Scenario. cell factory pipeline is already far higher than our
Accounts for operational factories, but not closures nor retrofits of existing fleet. Sectors include projected demand.
upstream components, such as polysilicon for PV and anodes for batteries. Electrolyzer historical
average taken over 2021-22.

20 Energy Transition Investment Trends 2023

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21 Energy Transition Investment Trends 2023
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