About three-quarters of this support was technology neutral within renewable energy types in 2024, while solar and wind continued to attract the bulk of dedicated capital.
Japan and the United States were the leading contributors, with combined spending of approximately USD 81 billion. However, U.S. support may show a different picture for 2025–2026, as policy changes have tightened eligibility for tax credits, introduced budget cuts, and made incentives more conditional, contributing to a decline in solar installations in 2025.
China has sharply reduced its renewable financial support from its 2022 peak of about USD 66 billion to around USD 15 billion in 2023. That peak, however, was an anomaly driven by a one-off effort to clear accumulated payment arrears under their feed-in-tariff system. The reduction also reflects a broader, ongoing shift toward more market-oriented support mechanisms.
State-Owned Enterprises: Increased renewable investment amid fossil dominance
Globally, energy state-owned enterprises (SOEs) are responsible for over 50% of oil and gas production and 60% of coal production and coal power generation. Investment decisions by SOEs not only shape energy production, but also national energy security, government revenues, employment, and, in many cases, vital community services.
For these firms, a continued focus on fossil fuels creates financial, security, and environmental risks that are borne by the public, neglecting opportunities to meet their public service obligations through a diverse energy supply. The current fossil price spikes are likely to accelerate the clean energy transition, and SOEs that invest in fossil fuel infrastructure will be increasingly exposed to stranded asset risks.
Governments should direct energy SOEs to invest in solutions that improve national energy independence and SOEs’ financial health. These include renewable energy installations, grids, battery and storage systems, as well as electrification.
Energy SOEs in G20 countries are mostly struggling to realign their capital expenditures (CapEx) with energy transition priorities. In 2024, they spent over USD 360 billion on energy CapEx—covering the acquisition, construction, and upgrading of physical assets across fossil fuels, renewable energy, and electricity transmission and distribution (T&D) networks. Around 81% of this investment (amounting to over USD 290 billion) funded fossil fuel infrastructure, and only the remaining 19% went to renewable power, T&D, and storage technologies.
The contrast with broader global energy investment trends (both public and private) is striking: in 2024, renewables, T&D, and storage received over USD 1.2 trillion in investments, as opposed to over USD 1.1 trillion going to fossil fuels. This suggests that many SOEs are transitioning away from fossil fuels at a slower pace than other global actors, often due to a lack of clear transition mandates from their governments.
Yet different types of SOEs face different transition challenges. Renewable energy CapEx has grown gradually, from USD 22 billion in 2020 to approximately 39 billion in 2024. The shift is most pronounced among state power and coal companies, whose renewable CapEx grew by 68% between 2020 and 2024, as opposed to a 49% growth in their fossil CapEx. A few countries have been leaders in this transition, primarily China (73% of the total increase), and to a lesser extent India (14%) and France (10%).
National oil companies (NOCs) continue to face significant transition challenges and account for the majority of SOEs’ fossil fuel CapEx between 2020 and 2024. NOCs often serve as the primary source of fiscal revenues for national governments and provide social services and employment in areas of operation. This makes NOCs’ transition pathways inseparable from strategies for national economic diversification and transitioning away from fossil fuels.
Disaggregating renewable energy financing by technology type remains difficult due to inconsistent reporting, but available data point to some clear trends. Solar photovoltaic has seen consistent growth, with average annual increases of 50% between 2020 and 2024. Wind investments, meanwhile, declined between 2020 and 2022 before recovering slightly in 2024—mirroring global trends and reflecting challenges faced by wind developers as inflation and borrowing costs rose sharply in 2022–2023.
The installation of more renewable energy capacity is being accompanied by a notable uptick in spending on T&D infrastructure. This is crucial to integrate variable renewable sources, as well as to accommodate increasing electricity demand from electrification. Among tracked SOEs, T&D spending almost doubled from around USD 16 billion in 2020 to over USD 30 billion in 2024. Most of the increase was driven by Saudi Electricity Company’s USD 13 billion investment in grids, reflecting the country’s ambition to source 50% of its electricity from renewables by 2030 followed by clean investments by South Korea’s KEPCO, Indonesia’s PLN and France’s EDF, among others.
International Public Finance: Right direction, but still missing speed
Over the past decade, G20 governments and major multilateral development banks have provided an average of over USD 100 billion each year in international finance for energy projects. Since 2016, fossil fuel financing has been trending down (reaching USD 37 billion in 2024), while clean energy financing has seen a steady increase (rounding at USD 47 billion in 2024), partly due to the successful implementation of the Clean Energy Transition Partnership commitment by 40 governments to end international public finance for fossil fuels and redirect it toward clean energy.
While the trend has been generally positive, international public finance can and should do more. This is especially true in light of the key role it can play in catalyzing investments in clean energy for improved energy security, reducing vulnerability to volatile fossil fuel markets.
Redirecting Finance in a Volatile World
Public financial flows remain fundamentally misaligned with climate and energy security goals—and the social costs of staying on the current path are mounting.
Energy crises do not affect everyone equally: they hit low- and middle-income households hardest, erode purchasing power, and force trade-offs between essential needs like food, transport, and heating.
Past crises have shown a consistent pattern: governments respond to price spikes with expanded fossil fuel support, particularly subsidies, to shield consumers. Yet these measures are often inefficient and regressive—disproportionately benefiting higher-income groups while locking in fiscal burdens that ultimately fall back on taxpayers. Over time, they entrench fossil fuel dependence and leave households exposed to the next shock.
Breaking this cycle requires a deliberate shift in how public finance is deployed. Governments should:
- In the short term, prioritize targeted social protection over blanket fossil fuel subsidies—especially during the ongoing crisis. Measures like cash transfers, cost-of-living support, and energy assistance for low-income households can protect purchasing power quickly and fairly, without locking in costly and regressive subsidy schemes.
- In the medium term, use public finance to structurally reduce exposure to future shocks. Scaling up investment in clean energy and electrification—while aligning subsidies, state-owned enterprise investments, and international public finance with transition goals—can lower energy bills, reduce volatility, and build more resilient systems over the long term.
Without this shift, governments risk reinforcing a cycle in which each crisis deepens inequality and fiscal pressure. With it, they can shield households and businesses and reduce the likelihood and impact of future crises—building energy systems that are not only cleaner, but fairer and more secure.