IEA Points to Shift in 2016 World Energy Investment

The electricity sector edged ahead of the fossil fuel supply industry – coal, oil and gas – to become the largest recipient of world energy investment in 2016 for the first time ever, according to the International Energy Agency’s World Energy Investment (WEI) report, published July 11.

Energy investment worldwide was some $1.7 trillion in 2016, 12% less than 2015 in real terms and accounting for 2.2% of global GDP. Last year was the second consecutive year of decline. 

While total investment in fossil fuel supplies fell by 25% to just under $750mn, investments in electricity networks, renewables and thermal power plants combined were a similar amount, but declined by just 1%. Energy efficiency investment increased by 9% to just under $250mn, of which 27% was in China. IEA executive director Fatih Birol noted: "The good news is that in spite of low energy prices, energy efficiency spending is rising thanks to strong government policies in key markets."

China remained the biggest destination for energy investment in 2016 at $357bn (21% of the global total – chiefly on power supply and networks), ahead of the US at $276bn and Europe $245bn. But China's investment in coal-fired power declined by 25% last year.

An expanded feature about the IEA's WEI report will appear in NGW's forthcoming magazine.

Mark Smedley