Investment in Wind and Solar Is Set to Outpace Oil

Investment in Wind and Solar Is Set to Outpace Oil and Gas Drilling for the First Time This Year as Wind and Solar Payback Times Are Under a Year in Some Parts of the World

For the first time in world history, investment in wind and solar this year is set to outpace oil and gas drilling.

In spite of a spiraling energy crisis and calls to increase fossil fuel production, renewables are attractive to countries facing soaring costs because wind and solar have no fuel costs and are produced domestically.

In the United States, the U.S. Energy Information Administration projects renewables will generate more power in the country this year than coal.

Reducing the Cost of Solar and Wind

“The strongest engine of the global energy transition is the rapidly reducing costs of solar and wind energy, which will outweigh the present short-term shocks to the energy system”, said Remi Eriksen, President and CEO of DNV, a company that tracks energy markets.

“In 2022, capital spending on wind and solar is projected to reach $494 billion, eclipsing the $446 billion spent on upstream oil and gas production. This marks the first time that spending on wind and solar has eclipsed oil and gas drilling.High power prices will increase the returns for renewable projects,… and… renewable projects in a handful of European countries can pay back their costs within a year at current power prices.”

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