Global energy investment drops 8% to $1.83 trillion

JEDDAH: The World Energy Investment (WEI) 2016 report has been released by the International Energy Agency (IEA).

According to the report, energy investment in the global economy totaled $1.83 trillion in 2015, down 8 percent from the previous year. Energy supply spending was at its lowest level since 2010.
Fossil fuels still account for 55 percent of 2015 global energy investment, but the share declined from 61 percent in 2014.
China’s investment in energy supply amounted to $315 billion in 2015, once again bypassing the United States as the world’s largest energy investor.
The upstream oil and gas sector remained the biggest energy investment category in 2015, with spending of $583 billion.
But fast-declining costs accounted for about two-thirds of the over $300 billion drop in investment between 2014 and 2016.
Upstream spending is seen to remain stable or decline slightly in 2017.
With lower exploration costs, the Middle East and Russia represent the most resilient regions.
The share of national oil companies reached 44 percent of global upstream investment, an all-time high, while North American shale and other high-development costs areas such as offshore have seen the biggest reductions.
Still, North America remains the largest investor in 2016, although at $138 billion, its upstream investments are less than half of those in 2014.
Electricity generation spending reached $420 billion, with renewables accounting for the about 70 percent of the total, or $288 billion.
The WEI report said gas generation investment plummeted by 40 percent to $31 billion, while coal investment rose by nearly a quarter to $78 billion, largely due to China.
Spending on all renewable energy sources, including biofuels for transport and solar thermal heat installations, totaled $313 billion, as part of a broad reorientation in investment toward low-carbon energy sources.
Between 2011 and 2015, renewable power capacity spending was relatively flat.
China was the largest destination of renewables-based power capacity investment, reaching more than $90 billion or over 60 percent of its total investment in generation in 2015.
For the first time, Chinese investment in wind overtook hydropower.
China is also the world’s largest investor in solar thermal heating installations ($15 billion).
In 2015, China invested nearly $45 billion in fossil fuel power generation, mostly coal, and brought 52 GW of coal capacity online.
China accounted for most of the new nuclear construction starts in 2015 and was also the biggest spender on energy efficient passenger vehicles.
Renewable power investment in the European Union reached $55 billion, or over 85 percent of Europe’s generation investments, with wind accounting for over one half.
In the United States, renewable electricity investment, at near $40 billion, comprised almost 90 percent of generation investment. Renewables spending also remained robust in Japan, Brazil and India in 2015.
Electricity networks investment grew to over $260 billion in 2015, a 14 percent increase from 2014.
At $1 billion, grid-scale battery investment was ten times higher than in 2010 and was 10 percent of electricity storage investment, with the rest mostly from pumped hydro storage. China, the United States, the European Union and India were the largest investors in networks.
Nuclear capacity additions, at over 10 GW, reached their highest level in over two decades, representing investment of $21 billion. China comprised most of this and most of the nearly 70 GW in construction globally.
Energy efficiency investment reached $221 billion, representing 12 percent of total spending last year and an increase of 6 percent from the previous year.
In the United States, the largest transportation fuel market, lower oil prices slowed the trend toward more fuel-efficient vehicles but new vehicles were nonetheless more efficient on average in 2015 than 2014.
Similarly, in the United States, electric vehicle sales declined in 2014 but globally they reached the record level of 550 000, and continue growing in 2016, led by China and Europe.
Energy efficiency investment in the building sector, including appliances and lighting, was $118 billion.
Investment in LNG liquefaction terminals peaked in the past two years with annual spending around $35 billion, thanks to conversion and completion of liquefaction plants in Australia and the United States.
Investment in coal supply reached $68 billion, its lowest level in more than a decade, following a decline in coal consumption in China and the United States.