Global clean energy investment is projected to soar to an unprecedented $2.2 trillion this year, more than double the amount going into fossil fuels, the International Energy Agency (IEA) has said.
However, the agency has warned that lagging investment in electricity grids could undermine progress in the global energy transition. This shortfall is already manifesting in developing economies like Nigeria, where infrastructure limitations are hampering the delivery of newly generated clean power.
While the country has an installed generation capacity of approximately 13,500MW, it reliably delivers only about 4,000MW to 5,100MW, due largely to transmission and distribution constraints.
Much of Nigeria’s grid infrastructure, some dating back more than four decades, suffers from underinvestment, ageing components and vandalism. The structural weaknesses continue to undermine economic growth and industrial productivity,
The 2025 IEA’s World Energy Investment report highlighted that while capital is pouring into solar, wind batteries and electric vehicles, annual grid investment, currently at $400 billion, is not keeping pace with the rapid growth in power generation and electrification.
The report cautioned that the growing imbalance could pose serious threats to electricity security and system reliability in the coming years.
Driven by a combination of emission reduction targets, industrial policies, energy security concerns and cost advantages, clean technologies are increasingly outpacing traditional energy sources in attracting capital.
Solar PV alone is expected to draw $450 billion in investment in 2025, with battery storage also seeing a sharp rise, set to exceed $65 billion this year.
But the infrastructure needed to deliver that electricity, particularly transmission and distribution networks is not expanding fast enough to match the speed of generation deployment.
“To maintain electricity security, grid investment must rise to match generation spending by the early 2030s,” the report stated, warning that lengthy permitting processes and strained supply chains are slowing progress.
It added that nuclear power has seen a 50 per cent increase in capital flows over the past five years, which are projected to reach around $75 billion in 2025. To bridge Africa’s electricity gap by 2030, the IEA estimates that countries like Nigeria would need to attract approximately $100 billion in annual energy investment.
IEA Executive Director, Fatih Birol, said the shift towards an ‘age of electricity’ is evident as investments in electricity generation, grids and storage now surpass those in fossil fuels by 50 per cent.
While this surge in spending marks a positive trend for global decarbonisation, the agency warns that energy systems must remain balanced. Without robust, modernised grid infrastructure, the benefits of clean technology investments could be lost to inefficiencies, curtailments and reliability risks.
