According to the latest IEA Government Energy Spending Tracker, governments have contributed USD 1.34 trillion to renewable energy investment since 2020.
The previous six months saw USD 130 billion in new expenditure, among the slowest since the COVID-19 epidemic began.Australia, Brazil, Canada, the EU, and Japan are considering new policy packages, which may shorten this delay.
Government expenditure is already driving renewable energy investment and clean technology supply chains to new heights, and it will continue to do so.
Governments also spend more on controlling consumer energy price shocks. Since early 2022, governments have spent USD 900 billion on short-term consumer affordability initiatives. 30% of this affordability investment was disclosed within six months.
USD 90 billion in direct subsidies for local renewable energy technology manufacturers.
These steps have moderated end-user price increases, but the energy crisis nonetheless hurt many budgets. As energy costs outpaced nominal wage growth in 2022, the average family paid a greater percentage of its income on energy, according to the IEA’s newest end-user pricing statistics from 12 countries, representing roughly 60% of the world population.
In large economies, households spend between 3% and 7% of their earnings to heat, cool, power, and cook. Low-income households spend more. Government actions only increased energy spending by 1% in most major economies.
Consumers felt it more at the pump, especially in emerging markets and developing countries, as transport fuels and food accounted for the joint highest rise in household expenditure in 2022. Government involvement reduced this. In Indonesia, without affordability help, family energy spending would have quadrupled in 2022.
Wholesale energy costs are falling early in 2023. Retail prices won’t decline as fast. In 2022, electric automobiles and heat pumps saw record sales due to high pricing. High pricing will boost renewable energy technology adoption, accelerating the new energy economy.