Coronavirus is causing a huge drop in energy investment
- Ben Geman, author of Axios Generate
Reproduced from IEA; Chart: Axios Visuals
The coronavirus pandemic is causing the "largest decline in energy investment on record," with capital spending worldwide slated to fall by roughly $400 billion this year, the International Energy Agency said in a new report.
The state of play: The roughly 20% aggregate decline is affecting the oil industry, renewables and other power sectors, and energy efficiency-related investments, though IEA sees renewables proving more "resilient" than other fuels.
Why it matters: IEA executive director Fatih Birol, in a statement alongside the new estimates, called the data "deeply troubling," citing lost jobs and economic opportunity.
The big picture: The pandemic is slowing investment due to restrictions on movement of people and goods, supply chain problems and more.
- The oil-and-gas sector is taking the biggest hit due to the collapse in prices in demand.
- The chart above shows the forecast drops in the exploration and production side of the business. And the shale sector specifically is slated to see a 50% cut.
What they found: The report estimates that the electric power sector will see a 10% drop in year-over-year investment.
- Elsewhere, "sharp reductions to auto sales and construction and industrial activity are set to stall progress in improving energy efficiency."
Threat level: "The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems," said Birol, who also tweeted about the overall findings.
Go deeper: