To see the future, follow the money.

This eye-catching IEA graphic has one clear message: clean energy expenditure (including grids) is now double that of fossil fuels, at $2.2 trillion vs $1.1 trillion annually, from roughly equal a decade ago. Oil expenditure has fallen by a third in that time, and gas by just under 20%. Meanwhile, both renewables and electrification spend have more than doubled, grids and storage have risen by around 45% and energy efficiency is also up by around half. Coal investment actually increased marginally (although coal for power generation expenditure is actually slightly down) and nuclear is also up but remains relatively marginal. Within that renewables band, solar has roughly tripled, while battery storage has gone from zero to $66 billion, and rising fast.

As the figures are in 2024 USD, they do not reflect the fact that $1 billion spent in 2025 buys significantly more solar panels and batteries that it did in 2015. Nor does it illustrate that $1 billion spent on that hardware today can continually harness electricity for three decades, rather than providing energy via one-off combustion that needs to be continually replaced, as for coal, oil and gas. 

A decade from now, the clean:fossil spend ratio will undoubtedly be much higher than 2:1. Given the denominator is likely to fall as coal and oil demand peak, and the gas market is about to enter years of heavy oversupply, 5:1 or even 10:1 doesn’t seem far-fetched. It’s also likely that the imbalance between reneable generation capacity ($1 trillion), grid capacity investments ($400 billion) and storage (a mere $66 billion) will start to even out, enabling clean generation to achieve greater reach and flexibility.

But there is more going on here than just the AI frenzy. Although data centres will play a bigger relative role in the US, globally they are not the main driver of new electricity demand. The deeper structural shift towards electrification of transport and heat across industry and building, as well as space cooling, will be bigger drivers of demand for cables, electrical equipment and flexibility software. As the marginal power supply is increasingly met by solar and wind, increasingly supported by batteries, this creates a chain reaction of demand for supporting infrastructure and components. And that wave of solar and batteries is about to get much bigger…

Note that this occurred in the first half of this year despite a fall in hydropower output, which we could normally expect to stay reasonably consistent. Absent that, the fall in fossil generation would have been more than double what it was. But although China is set to build the world’s largest hydropower project in Tibet over the next few years, this story is not ultimately about hydro. It’s about the rapid expansion of renewables that can be manufactured to harvest effectively limitless free resources (sun and wind), backed by explosive growth in batteries to store their output, just as the invention of refrigeration changed the food industry.

It could be that we are entering a plateau phase where new clean output roughly keeps pace with incremental demand. But all the evidence points to much higher solar and wind output, so it seems inevitable that this will outpace demand. That in turn will pressure the returns on existing fossil generation plants and certainly any planned new ones. 

Of course, the big driver of change is China, which is powering forward in electrification and renewable output, while the US administration seems more focused on putting up new barriers to clean energy. It is all too tempting to contrast the two directions of travel - as per these headlines published on the very same day last week:

Petrostate vs Electrostate

The story virtually writes itself. A tale of two energy superpowers: the Petrostate versus the Electrostate, with all the geopolitical implications that are outside the scope of this piece. There is no doubt that the US’ energy transition will now be slower than it would otherwise have been without the switch from Inflation Reduction Act to One Big Beautiful Bill (or the Inflation Induction Act, as it has been aptly dubbed).

Meanwhile, China’s energy transformation, built on technology, manufacturing and control of supply chains, has burst its domestic dam and is flooding out in all directions around the world via exports of ever cheaper energy infrastructure, both on the supply side (solar panels, batteries) and demand side (EVs).

China is not only the world’s electrification leader - it is accelerating further ahead versus the US and Europe. In China, EVs reached more than half of all new vehicle sales in June, just 4 short years after internal combusion engine (ICE) totally dominated. And where China leads, the world is following, based on compelling economic self-interest. As Chinese supply expands and costs fall, the same crossover will inevitably ensue in many markets. We are already seeing this in markets as diverse as Ethiopia and Nepal.

It is no coincidence that at the same time we are also seeing Chinese emissions plateauing - another critical tipping point. After this plateau, it’s simply a question of the speed of systemic change. That speed may well surprise those who still claim the transition is slowing down. EVs are increasingly eroding fuel demand across the world - reducing oil demand by 1.3 million barrels per day last year and forecast for 1.8 mbd this year. That number can only increase. China has been easily leading driver of incremental oil demand and emissions in the first quarter of this century, but it’s per capita road transport oil demand is topping out at a fraction of the US. 

There is no turning back. Economics and simple pragmatism trump reactionary ideology. Speed to power has become essential.

The reality is that renewables are prevailing even in Trump’s US, implying that even the world’s great petrostate will also ultimately become an electrostate, even on a different schedule. That is a very strong indicator of the prospects for clean energy technologies just about everywhere else, as adoption curves in Africa and Asia are already proving. 

Make no mistake: the transformation of energy is definitely speeding up…