The International Energy Agency (IEA) is warning that investors are not putting enough money into the energy that will fuel the world’s economy in the future.
In its new World Energy Investment 2019 report, the IEA says that global energy investment stabilized in 2018 to more than US$1.8 trillion, ending three consecutive years of decline. But that doesn’t help the overall spending outlook in terms of meeting future energy demand.
“Even as investments stabilized, approvals for new conventional oil and gas projects fell short of what would be needed to meet continued robust growth in global energy demand,” the IEA said in a statement.
“At the same time, there are few signs of the substantial reallocation of capital towards energy efficiency and cleaner supply sources that is needed to bring investments in line with the Paris Agreement and other sustainable development goals.”
Energy investments now face unprecedented uncertainties, with shifts in markets, policies and technologies, said IEA executive director Fatih Birol. The bottom line, he said, “is that the world is not investing enough in traditional elements of supply to maintain today’s consumption patterns, nor is it investing enough in cleaner energy technologies to change course. Whichever way you look, we are storing up risks for the future."
Global energy investment totalled more than US$1.8 trillion in 2018, a level similar to 2017, according to the IEA.
“For the third year in a row, the power sector attracted more investment than the oil and gas industry. The biggest jump in overall energy investment was in the United States, where it was boosted by higher spending in upstream supply, particularly shale, but also electricity networks.
“The increase narrowed the gap between the United States and China, which remained the world’s largest investment destination.”