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Global energy investment down, but renewables and efficiency buck trend
A fall in oil and gas upstream spending over 2015 led to global energy investment dropping by 8% when compared to 2014, while spending on renewables, electricity networks and energy efficiency remained constant.
These are the findings of the International Energy Agency’s (IEA) inaugural World Energy Investment 2016 (WEI 2016) report, which says that total investment in the energy sector dropped to $1.8tn in 2015, from $2tn in 2014.
Despite the overall drop, spending on energy efficiency and renewables remained robust. The IEA says that this is an indication that the energy system is undergoing a ‘broad reorientation’ towards low carbon energy and efficiency, but the organisation still says that ‘investment in key clean energy technologies needs to be further ramped up to put the world economy on track for climate stabilisation’.
Renewables were the largest source of power investment in 2015 at $313bn, and accounted for around a fifth of total energy spending. The report also makes the point that investment in renewables is now going further, due to the falling costs of renewable technologies, with the same spending levels in 2015 resulting in a third more renewable electricity generation when compared to spending and output levels in 2011.
‘We see a broad shift of spending toward cleaner energy, often as a result of government policies,’ said IEA Executive Director Fatih Birol. ‘Our report clearly shows that such government measures can work, and are key to a successful energy transition. But while some progress has been achieved, investors need clarity and certainty from policymakers. Governments must not only maintain but heighten their commitment to achieve energy security and climate goals.’
The report finds that China was the world’s largest energy investor in 2015, with the majority of its $315bn spend allocated to low carbon generation and electricity networks. The US accounted for half of the total decline in global spending as a result of low oil prices.
News Item details
Journal title: Energy World
Subjects: Manufacturing engineering, Energy efficiency, Banking, finance and investment, Gas markets, Oil markets, Electricity generation, Oil and gas, Exploration and production, Oil prices, Renewables, Energy policy, Environmental policy, Innovation
