Advanced solutions – including hydrogen, sustainable aviation fuels, advanced nuclear, storage, carbon and demand management – harness, manage and use clean energy across the energy system. As key enablers of the energy transition, they help address the intermittency of renewable energy, enable electrification of transport and industry, improve system efficiency, decarbonize hard-to-abate sectors and eliminate CO2 from the atmosphere.

The IEA estimates that around $2.8 trillion will be invested in energy in 2023. More than $1.7 trillion is going to clean energy, including renewable power, nuclear, grids, storage, low-emission fuels, efficiency improvements and end-use renewables and electrification. For every $1 spent on fossil fuels, $1.7 is now spent on clean energy. Five years ago this ratio was 1:1.

Figure 13: The price of solar modules declined by 99.6% since 1976

Like wind and solar, the giga scale and industrialization of advanced solutions have the potential to drive down costs – thus, there is a need to exponentially accelerate the speed and scale of their deployment. For example, to be on the path to net zero by 2050, the energy system needs to see battery storage capacity grow 15 times²²²² and carbon capture, usage and storage 40 times²³²³ by 2030. Similarly, the clean hydrogen market is expected to grow from $0.5 billion to $120 billion²⁴²⁴ and advanced biofuels from $3 billion to $180 billion.²⁵²⁵

Deployment at this scale needs to be backed by significant capital. The IEA notes that $0.9 trillion needs to be invested by 2030 to modernize electricity networks and build public electric vehicle charging stations, hydrogen refuelling stations, direct air capture and CO2 pipelines, storage facilities, and import and export terminals. Further, $1.7 trillion needs to be invested annually in low-carbon technologies in end-use sectors.²⁶²⁶ Most of this investment will need to come from the private sector, supported by public policies that create incentives and set appropriate regulatory frameworks.

A growing number of investors from both specialized and larger infrastructure funds are actively seeking opportunities in the sector. Moreover, governments provide strong support through policies aiming to multiply clean energy investments. Innovative capital market instruments, such as green bonds, open additional avenues to increase funding. The green bonds market experienced spectacular growth from $36 billion worth of issuances to $270 billion in 2020.^{27 27}Subsequently, an increasing number of projects are being announced and deployed. The IEA has observed that, “announced [electric vehicle] battery production capacity for 2030 is only 15% lower than the level of battery demand underpinning the IEA’s Net Zero Emissions Scenario” and “cumulative output of electrolyser manufacturing capacity could reach 380 GW by 2030, which is still little more than half of 2030 needs” in that scenario.²⁸²⁸

However, it is often difficult for investors to find opportunities that match their profile in terms of scale and maturity. The risk appetite of financial institutions is not always tailored to support advanced solutions. This is a challenge in emerging markets and developing economies, causing them to receive a small fraction of investments. In addition, sovereign and currency risks, the lack of standards and regulations, and slow permitting processes remain significant barriers to clean energy investments in these economies.

Achieving the needed pace and scale of growth and investments requires innovators, large energy producers and users, and investors to form partnerships and play their part. To aid in this process, the World Economic Forum is producing the “Handbook for Exponential Deployment of Advanced Energy”, which will include a set of strategic recommendations for these key stakeholders to expand and accelerate the deployment of advanced energy solutions. This initiative, led by the Forum’s Advanced Energy Solutions community, engages leaders in frontier, fast-growing segments of the energy system and seeks to help eradicate the green premium and maximize co-benefits.