The International Energy Agency (IEA) has published its 2018 World Energy Investment report, which highlights the ways in which investment decisions taken today are determining how energy supply and demand will unfold tomorrow.
This year’s edition points to another year of falling investment in 2017, and that energy investment is failing to keep up with energy security and sustainability goals.
“The decline in global investment for renewables and energy efficiency combined could threaten the expansion of clean energy needed to meet energy security, climate and clean-air goals,” said Fatih Birol, executive director, IEA.
Birol added: “While we would need this investment to go up rapidly, it is disappointing to find that it might be falling this year.”
Read also: Fossil fuel to account for 53 percent of world energy demand up to 2040 – Seplat boss
According to the organisation, some of the key findings are: 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; state-backed investments are accounting for a rising share of global energy investment, as state-owned enterprises have remained more resilient in oil and gas and thermal power compared with the private sector.
Other findings include; the share of global energy investment driven by state-owned enterprises increased over the past five years to over 40 percent in 2017; across all power sector investments, more than 95 percent of investment is now based on regulation or contracts for remuneration; investment in energy efficiency is particularly linked to government policy, often through energy performance standards; in emerging markets the average size of awarded solar PV projects in auctions rose by 4.5 times while that of onshore wind rose by half over 2013-17, helping to support economies of scale.
Meanwhile, in Europe, tendered large projects are mainly concentrated in offshore wind; auctions have generally not resulted in large, land-based renewables projects.
