Energy Transition Investment Outlook: 2025 and Beyond (KPMG Switzerland)

Summary

• The report is based on a survey of 1,400 senior executives from 36 countries and 11 sectors who work in organizations actively investing in the energy transition.p.3
• Of the US$3 trillion in global energy transition investment expected in 2024, a record high, some US$2 trillion will be in clean energy technologies and infrastructure, close to twice the investment in fossil fuels.p.6
• 72 percent of investors believe that investment in energy transition assets is increasing rapidly.p.6
• The expected 2024 investment includes US$771 billion in renewables, US$669 billion in efficiency and electrification, and US$452 billion in grids and storage.p.9
• Regulatory or policy risks are the top barrier to investing in energy transition assets at 40%, followed by market volatility or uncertainty at 36% and technology performance uncertainty at 33%.p.26
• Only 25 percent of investors have stopped making new investments in fossil fuels, and global fossil fuel investment is expected to be over US$1.1 trillion in 2024.p.17
• Feed-in tariffs (43%) are the most important government policy for driving investment, ahead of regulatory support (35%) and tax incentives (34%).p.28

Key insights

1. 64 percent of respondents have invested in energy efficiency technologies over the past two years, the highest of all asset types, ahead of renewables (56%), storage and grid infrastructure (54%) and transport infrastructure (51%).p.8
2. Three quarters of the capital for energy transition comes from private and commercial sources.p.7
3. Investors have focused on East Asia (54%), Europe (52%) and North America (52%) over the past two years.p.13
4. Only 15 percent of all clean energy investment occurs in emerging and developing countries excluding China.p.15
5. 61% of energy transition investors believe that geopolitics has slowed the rate of the energy transition.p.18
6. Fossil fuels currently account for 82 percent of the energy mix.p.18
7. 64 percent of respondents say government policy is critical to the profitability of investments.p.27
8. Saudi Arabia plans to increase its renewable energy generation capacity from 5 to 130 gigawatts by 2030.p.15