Info!
UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.
UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.
Global energy investment in 2018 stabilises after three years of decline
Global energy investment remained relatively stable in 2018 at over $1.8tn, following three years of decline, according to a new report from the International Energy Agency (IEA).
The World Energy Investment 2019 report shows an increase in capital spending on oil, gas and coal supply. Meanwhile, investment in energy efficiency was stable and renewables spending decreased.
Power was the largest investment sector for the third consecutive year, reflecting the growing importance of electricity, demand for which grew at almost double the rate of growth for overall energy demand in 2018. However, power investment fell by 1% overall due to stable spending on gas in the US and lower solar power and coal investment in China.
The 4% increase in upstream oil and gas spending was driven by a higher oil price, increases in shale spending – particularly in the US – and a focus on shorter cycle projects which limit capital at risk, says the report.
Renewables-based power investment decreased by 1% due to flattening net additions to capacity and the falling costs of renewable technologies, particularly solar power and onshore wind, which experienced 70% and 20% drops in capital costs respectively on 2010 levels. Adjusting for these rapid declines in cost, renewable power investment has nevertheless increased by 55% since 2010.
The most recent rapid rise in energy investment came from India, which saw a 12% increase from 2015-2018. Renewable spending exceeded that of fossil fuel-based power, supported by favourable policies and the rapidly falling costs of solar power. This swift increase, asserts the IEA, makes India one of three key drivers of global energy investment alongside China and the US.
China, which remained the largest market for energy investment in 2018, saw investment decline by 7%, a change driven by 60% lower spends on coal-fired plants which outweighed relatively high investments in renewables and nuclear power. The EU saw similar levels of decline, although the share of spending going towards low-carbon energy has risen to nearly 60%.
According to the report, there are unfortunately few signs of the substantial reallocation of capital towards energy efficiency and cleaner supply sources needed to bring investments in line with the Paris Agreement.
Dr Fatih Birol, the IEA’s Executive Director, said: ‘Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies. But the bottom line is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future.’
The IEA suggests that investment in energy efficiency would need to accelerate quickly while overall investment in low-carbon energy should more than double by 2030, if we are to meet the goals of the Paris Agreement.
