The International Energy Agency (IEA) has released a World Energy Outlook (WEO) Special Report, 'World Energy Investment Outlook.' Under the main scenario in the report, the 'New Policies Scenario,' the world will need to invest US$40 trillion in energy supply and US$8 trillion in energy efficiency over the period to 2035 to meet its energy needs.
Of the investment in energy supply, US$6 trillion is in renewables in the power sector.
3 June 2014: The world will need to invest US$40 trillion in energy supply, including US$6 trillion in renewables, and US$8 trillion in energy efficiency over the period to 2035 to meet its energy needs, according to the World Energy Investment Outlook. The International Energy Agency (IEA) published the Outlook, which projects energy demand and corresponding investment to 2035, as a World Energy Outlook (WEO) Special Report.
The report’s ‘New Policies Scenario’ states that over half of this investment in energy-supply is required to keep current production levels constant. Annual investment in energy supply will have to grow from US$1.6 trillion to US$2 trillion by 2035, and energy efficiency investments must grow from US$130 billion annually to US$550 billion. Of the energy efficiency investments, 90% will be in the building and transport sectors.
The world will not meet its target of keeping global average temperature from rising more than 2°C under current policy frameworks, according to the report’s analysis. To meet this target, the report states that a US$53 trillion investment in energy supply and efficiency is required.
At the report launch, IEA Executive Director Maria van der Hoeven noted that “today’s policies and market signals are simply not strong enough to meet the world’s climate change target.” She stressed the importance of quality in policymaking to drive investment in the right direction, explaining that “clear and credible signals from policy makers lower risks and inspire confidence. By contrast, where there is a record of policy incoherence, confusing signals or stop‐and‐go policy cycles, investors end up paying more for their finance, consumers pay more for their energy, and some projects that are needed simply won’t go ahead.”
The report also presents data on trends, which show annual investment in new energy supply derived from renewable sources has quadrupled in real terms since the year 2000. Renewables, biofuels and nuclear power together account for 15% of annual investment flows.
The report also highlights the importance of new sources of finance to ensure long-term finance is sufficient to meet climate change targets. [IEA Press Release] [Publication: Special Report: World Energy Investment Outlook] [IEA Executive Director Remarks]