Global spending on low-carbon projects is set to hit $620 billion in 2023, up from about $560 billion last year, thanks to a significant rise in hydrogen and carbon capture projects, Rystad Energy research shows.
The growth in total spending is a slowdown from recent years – which averaged 20% annual increases – as cost-conscious developers tighten their purse strings after two years of soaring prices.
Spending growth will vary widely across industries. Hydrogen and CCUS are expected to see the most significant annual increase, growing 149% and 136%, respectively. Total hydrogen spending will approach $7.8 billion in 2023, while CCUS investments will total about $7.4 billion.
In contrast, the hydropower market is expected to shrink over 2022, while nuclear investments are forecast to stay relatively flat. Onshore wind investments are projected to increase by 12% to about $230 billion, while offshore wind spending is expected to jump 20% to $48 billion. Expenditure in geothermal is expected to jump significantly – about 45% – albeit from a relatively low starting position.
Looking at the individual segment types, operations and maintenance companies will achieve the most growth this year (16%). These companies are more exposed to the overall installed operational capacity, which will grow this year at a similar pace to 2022, with last year’s additions entering their first full year of operations. These providers’ costs are also more labor-driven than other sectors, and high consumer inflation is likely to push up wages for skilled labor, inflating segment spending.
