The International Energy Agency (IEA) on Wednesday released its inaugural annual analysis on energy investments around the world, the World Energy Investment 2016. The report enumerates investment in global energy systems and indicates investment fell by 8% in 2015. The report’s executive summary said there was a drop in fossil fuel spending and “continued robust investment in renewables, electricity networks and energy efficiency.”
Total investment in the energy sector reached US$1.8 trillion in 2015, down from $2 trillion in 2014.
Renewables investment, primarily in wind, solar PV and hydropower was almost $290 billion.
“We see a broad shift of spending toward cleaner energy, often as a result of government policies,” said IEA Executive Director Fatih Birol.
With energy supply spending of $315 billion, China was once again the world’s largest energy investor last year thanks to robust efforts in building up low-carbon generation and electricity networks, as well as implementing energy efficiency policies.
In the U.S., investment in energy supply declined to about $280 billion in 2015, falling nearly $75 billion, due to low oil prices and cost deflation, representing half of the total decline in global energy spending.
The Middle East and Russia emerged as the most resilient regions to spending cuts, thanks respectively to lower production costs and currency movements. As a result, national oil companies accounted for 44% of overall upstream investments, an all-time high.
Renewable energy investments of $313 billion accounted for nearly one-fifth of total energy spending in 2015, establishing renewables as the largest source of power investment. While spending on renewable power capacity was flat between 2011 and 2015, electricity generation from the new capacity rose by one-third, reflecting the steep cost declines in wind turbines and solar PV. The investment in renewable power capacity in 2015 generates more than enough to cover global electricity demand growth.