Global investment in energy supplies dipped slightly last year, the third annual decline amid slowing growth of coal, hydro and nuclear power, which outpaced a boost in oil-and-gas, the International Energy Agency said.
By the numbers: Combined investment in oil-and-gas and electricity supply declined 2% to $1.8 trillion, a figure that represents 1.9% of global GDP, the Paris-based agency said in its annual report on spending trends and levels.
Why it matters
The report provides a snapshot of how the global energy system is evolving: Investments in electricity sector nonetheless exceeded investments oil-and-gas supply for the second time, "reflecting the ongoing electrification of the world’s economy and supported by robust investment in networks and renewable power," the agency said.
However, the gap has gotten narrower as oil-and-gas industry spending has rebounded somewhat from the sharp drops that followed the oil price collapse a few years ago.
Why IEA is worried
The growth of energy efficiency investments slowed, while total renewables investment fell by 7% and could drop more this year, the IEA said.
- The report calls this slowdown in these low-carbon investments worrisome from a climate change standpoint because it's happening as investments in new nuclear generations are falling sharply, and are at their lowest levels in five years.
IEA head Fatih Birol, in a statement alongside the report, called the efficiency and renewables trends a concern.
“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."
One level deeper
A couple of other data points in the 253-page report that caught my eye...
Shale: The report shows how major integrated oil companies — think the Exxons and Chevrons of the world — are increasingly investing in shale and tight oil, the stuff tapped via fracking.
- This year, tapping those resources is slated to account for 18% of their exploration and production spending, which is two to three times higher than it was in 2012-2016.
Carbon capture: The report underscores the challenges facing commercial deployment of technology to trap and store carbon emissions from industrial and power facilities.
- From 2007-2017, $28 billion in public funding was provided for capital and operational support worldwide, but just 15% of that has been spent.
"Clearly, the design of public support programmes and associated policies has generally not made the commercial conditions sufficiently attractive for project developers to take advantage of available public funds and put their own money at risk."— The report states