Investment in electricity globally rose to $750 billion in 2017, slightly higher than the $716 billion capital spending on oil and gas, the International Energy Agency (IEA) has said in a new report.
Total energy investment across the world was down two percent at $1.8 trillion from the total investment made in 2016, according to the IEA report.
The IEA’s annual world energy investment report noted that spending on the power sector was driven by grid investments as the world moves towards more electrification, while capital spending on renewables went down by three percent last year after several years of growth. The report also observed that it could decline further this year.
“Such a decline in global investment for renewables and energy efficiency combined is worrying,” Fatih Birol, IEA’s executive director said.
Many countries are having to invest more in upgrading or building new power networks to balance out demand and supply swings due to the rise of solar and wind power and electric vehicles.
China has decided to cut subsidies for new solar plants and restrict the number of new projects which raises the risk of a slowdown in investment this year.
“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,” Birol observed.
On the other hand, investment in fossil fuels increased last year for the first time since 2014 as the spending power of the oil and gas industry increased.
Also, state owned oil companies like Nigeria’s NNPC oil and gas upstream investment remained near record highs, a trend expected to continue this year, the IEA added.