Declining investment in green energy is "worrying" says IEA

Declining investment in green energy is "worrying" says IEA

Declining investment in green energy is "worrying" says IEA

Investment in energy in 2017 failed to keep up with energy security and sustainability goals.

That’s the key finding of the International Energy Agency’s latest review of energy sector spending.

It says that the electricity sector attracted most investment last year, beating oil and gas for a second straight year. That said, 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.

Globally, energy investment totalled U$1.8 trillion in 2017, a 2% decline in real terms from the previous year, with more than $750 billion going to the electricity sector and $715 billion spent on oil and gas supply.

State-owned investors have increased their share of energy investments to more than 40%.

Government policy means that investment from the private sector is less likely to be for new projects and more focused on regulation or contracts for remuneration.

Renewables investments weakening
The IEA says that investment in renewables was down 3% in 2017 and is likely to see further decline.

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.”

US shale prospects improving
The report also expects an improvement for US shale industry which is likely to impact other oil supplies including the Canadian oil sands.

“The United States shale industry is at turning point after a long period of operating on a fragile financial basis,” said Dr Birol. “The industry appears on track to achieve positive free cash flow for the first time ever this year, turning into a more mature and financially solid industry while production is growing at its fastest pace ever.”


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