IEA: Global energy investments fall for third consecutive year

By  Trend

Global energy investments have decreased for the third consecutive year in 2017, the International Energy Agency (IEA) said in its World Energy Investment 2018 report.

The report said that 2017 was the third consecutive year of decline in global energy investment with energy efficiency the lone sector of growth.

“Despite a 6 percent decline in spending, the electricity sector again attracted the largest share of energy sector investments, exceeding the oil and gas industry for the second year in row, as the energy sector moves toward greater electrification,” said the IEA.

Global energy investment totaled $1.8 trillion in 2017, a 2 percent decline in real terms from the previous year, according to the World Energy Investment 2018 report.

More than $750 billion went to the electricity sector while $715 billion was spent on oil and gas supply globally, according to the report.

The report also finds that after several years of growth, combined global investment in renewables and energy efficiency declined by 3 percent in 2017 and there is a risk that it will slow further this year. For instance, investment in renewable power, which accounted for two-thirds of power generation spending, dropped 7 percent in 2017.

While energy efficiency showed some of the strongest expansion in 2017, it was not enough to offset the decline in renewables. Moreover, efficiency investment growth has weakened in the past year as policy activity showed signs of slowing down.

“Such a decline in global investment for renewables and energy efficiency combined is worrying,” said Dr Fatih Birol, the IEA’s Executive Director. “This could threaten the expansion of clean energy needed to meet energy security, climate and clean-air goals. While we would need this investment to go up rapidly, it is disappointing to find that it might be falling this year.”

The share of fossil fuels in energy supply investment rose last year for the first time since 2014, as spending in oil and gas increased modestly. Meanwhile, retirements of nuclear power plants exceeded new construction starts as investment in the sector declined to its lowest level in five years in 2017.

The share of national oil companies in total oil and gas upstream investment remained near record highs, a trend expected to persist in 2018.