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Countries, companies, and banks are pledging their commitment to a rapid energy transition by 2050, dependent on a full-scale shift in what energy the world relies on. But how is the energy transition actually getting financed?

A new report from the University of Oxford paints a mixed picture; while coal is feeling the pinch, and many renewable energy sectors are growing rapidly, oil and gas financing has remained fairly resilient.

The report, out of Oxford’s Sustainable Finance Program, sought to track shifts in which sectors were getting financing, and at what cost, over the past two decades.

The report tracked the cost of debt across energy sources and electricity production by analyzing loan information on 12,072 loan deals compiled by LPC DealScan spanning from 2000 to 2020. The data extended across 5,033 borrowers in 188 countries in the energy and utilities business—from biofuels to coal plants to oil pipelines.

“While climate-related transition risks in the energy sector are sometimes viewed as distant, long-term risks, the impacts of which will not be felt for decades to come, we find this does not reflect reality,” the authors write.

Here are some of the highlights.

In the previous decade, financing patterns have indeed shifted—loan volumes for coal mining have sharply decreased as developed economies have moved away from the fuel (more on that below). But otherwise, the picture isn’t quite so clear-cut. While renewable energy has become increasingly competitive with fossil fuels, renewable loan volumes have actually declined, while loan volumes for “oil & gas” have increased. While both sectors are broadly capital intensive, renewables’ costs tend to be particularly front-loaded. The cost of capital—say, building and installing a wind turbine, rather than operating it once it’s up—is the single largest determinant of renewables’ cost.

This means financing costs and interest rates can have a large impact on whether or not renewables are competitive with fossil fuels, the report’s authors note.

But if the volume of financing for coal mining has decreased, the cost of that financing has gone up. The loan spread is a measure of how risky a financial institution thinks a loan is: A higher spread means a higher assessed likelihood that a borrower could default and not pay the bank back.

That jump in spreads was seen across all sectors, barring biofuels—but the jump was the highest for coal mining, with the average loan spread increasing by 65% in 2011–20 compared with the previous decade.

“This difference between coal mining and oil & gas reflects that lenders are potentially more ambivalent towards the latter when it comes to transition risk,” the report’s authors said.

Loan volumes for coal mining projects decreased sharply worldwide over the last decade. But when it comes to funding coal-fueled power plants for electricity, however, there are sharp regional divides: Such funding essentially evaporated in Europe in the past decade, and declined by nearly half in North America. In China, India, and the rest of Asia, however, coal power plants were still a rising force.

The global picture of electricity generation, however, shows financing for coal power plants—and, to some extent, gas—is declining. That’s amid sharp jumps in financing across hydropower, solar PV—or solar power produced by sunshine—and offshore wind.

Zoom out a bit farther to energy financing as a whole, and oil and gas financing still remains brisk. Only pipeline financing, and financing for unconventional oil and gas—usually associated with shale production—declined over the past decade.