April 11 (Renewables Now) - Global energy industry is expected to spend USD 2.1 trillion (EUR 1.92trn) in 2022, and invest primarily in oil and gas but also in renewables and hydrogen, according to a research by business intelligence firm Rystad Energy.

While the war in Ukraine was expected to derail the energy transition, investments in renewables will grow the most and account for 31% of total energy spending. Without the invasion, the share of green spending would be slightly bigger, Rystad Energy said.

Green energy investments will grow by 24% year-on-year, or USD 125 billion, led by a 64% growth in solar power spending. Other green sectors that will raise their expenditure in 2022 are onshore wind (by 24% year-on-year), geothermal (by 38%), hydrogen (by 37%), carbon capture and storage (by 54%) and batteries (by 29%). Offshore wind investments are projected to decline by 15%, Rystad Energy's figures show.

In contrast, upstream oil and gas spending is expected to grow by 16% on the year, or by USD 142 billion, Rystad Energy said.

The global inflation, labour costs and shipping rates caused by the pandemic and the sanctions against Russia, contributed to record levels of energy spending. According to Rystad Energy, the rise of steel prices pushed project costs in oil and gas to rise by 10% to 20% compared to 2020 levels. During the same period, key materials for the battery and solar PV manufacturing industry -- lithium, nickel, copper and polysilicon -- raised project costs for renewables by 10% to 35%.

“The world is now spending more on energy than ever before. The year 2014 was the last time we saw similar numbers. One can see a major shift in the amount of spending on green energy, which has increased, with a drop in expenditure on oil and gas. However, expenditure on other fossil fuels, such as coal, has remained constant,” commented Audun Martinsen, Head of Energy Service Research at Rystad Energy.

(USD 1.0 = EUR 0.915)

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