The transition to renewable power from traditional fuels will create a $16 trillion investment opportunity through 2030 as spending shifts to new infrastructure, according to Goldman Sachs analysts.
The bank projects green-energy spending to pass that of oil and gas for the first time ever next year and account for roughly 25% of all energy spending.
The share stood at just 15% in 2014, but a dive in fossil-fuel investing over the past decade shifted more dollars to clean energy initiatives.
Economic downturns have historically slowed efforts to boost clean energy investing, but Goldman sees the coronavirus downturn bucking that trend and accelerating the nationwide pivot.
"We believe this time will be different, especially for technologies that are now mature enough to be deployed at scale and can benefit from a falling cost of capital and an attractive regulatory framework, unlocking one of the largest infrastructure investment opportunities in history on our estimates," the team wrote.
The decade-long strategy isn't without its risks.
Goldman warned that low cost of capital and an attractive regulatory framework are "essential" to moving green infrastructure forward. Such projects can be as much as three-times more demanding of capital and jobs compared to traditional energy developments.If either side of the public-private collaboration falters, the transition will slow dramatically, the bank said.
Clean energy could between $1 trillion and $2 trillion a year in infrastructure investment and create 15 - 20 million jobs globally. Meanwhile the high cost of capital for fossil fuel developments is leading to underinvestment, which could lead to higher oil and gas prices that in turn spur a faster energy transition.
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“Renewable power will become the largest area of spending in the energy industry in 2021, on our estimates, surpassing upstream oil and gas for the first time in history,” Goldman said in the note.