The report highlights that energy efficiency represents “the lone sector of growth” in 2017.
While China leads on solar investment, Europe appears to be the frontrunner in offshore wind.
IEA’s Tracking Clean Energy Progress analysis finds that only four of 38 clean energy technologies are on track to deliver the Agency’s Sustainable Development Scenario goals.
24 July 2018: The International Energy Agency (IEA) report titled, ‘World Energy Investment 2018,’ finds a decline in global investment for renewables and energy efficiency in 2017, but notes that figures are impacted by declining costs. The report notes that state-backed investments account for an increasing share of global energy investment, and that the vast majority of power sector investments are driven by or linked to public policies.
Global energy investment has fallen for the third straight year, the report notes, declining by 2% to US$1.8 trillion. The report highlights that energy efficiency represents “the lone sector of growth” in 2017 and that investment in electricity generation and supply (US$750 billion) has exceeded that of oil and gas supply (US$716 billion) for the second year in a row, though the two categories have each declined relative to 2016 figures.
The report emphasizes declining costs’ impacts on investment trends, noting that unit costs for solar photovoltaic (PV) projects fell by an average of 15%. It underscores that although investment in renewable power declined by about 7%, there was record spending on solar PV, nearly half of which took place in China. An IEA commentary recalls the IEA’s Sustainable Development Scenario (SDS), which finds that “global investment in renewable electricity needs to almost double” in order to meet global climate, clean air and energy access goals. The SDS outlines “a major transformation of the global energy system,” demonstrating how the world can deliver on the three main energy-related SDGs simultaneously: enhancing energy access under SDG 7 (affordable and clean energy), achieving climate objectives under SDG 13 (climate action) and contributing to SDG 3 (good health and well-being) by tackling air pollution. [IEA Commentary on Decline in Renewables Investment] [IEA Sustainable Development Scenario]
China was a center for overall energy investment, the IEA highlights, “taking over one-fifth of the global total,” followed closely by the US, with Europe coming in third at around 15%. While China led on solar, Europe appears to be the frontrunner in offshore wind investment. In emerging markets overall, the report notes that “auctions are supporting larger renewable projects,” particularly in utility-scale solar PV. Globally, newly released IEA statistics show that solar, wind, geothermal and tidal comprised 5.6% of gross electricity production in 2016.
Auctions are supporting larger renewable projects in utility-scale solar PV in emerging markets.
The statistics reveal a leveling off of total gross electricity production in Organisation for Economic Co-operation and Development (OECD) countries, and continued growth in non-OECD countries, which have comprised the majority of global electricity production since 2011. IEA’s Electricity Information Overview notes that roughly two thirds of global electricity generation in 2016 was from fossil fuels. [IEA Updated Statistics Data Services]
Other technologies such as carbon capture, utilization and storage (CCUS) and electric batteries will also play a role in delivering the SDS goals. The report notes that on CCUS, commercial conditions have yet to attract private investment, but that carbon pricing incentives could trigger a change. Batteries’ impact, the IEA finds, will be dependent on cost trends that are influenced by investments outside of the energy sector. The report offers investment in lithium mining and battery manufacturing capacity as examples, which, since 2012, have increased almost tenfold and fivefold, respectively.
However, IEA’s Tracking Clean Energy Progress (TCEP) analysis, which looks at how quickly clean energy technologies are moving towards the SDS goals, finds that only four of 38 technologies are on track. In line with the report findings, TCEP highlights gains made by solar PV and the rapid uptake of more efficient light-emitting diode (LED) lighting, but also confirms stalled progress on CCUS. [IEA Tracking Clean Energy Progress]
The findings follow prior IEA reports that show continued growth in solar PV installation and energy efficiency projects, but express concern about declining funding for research, which “could affect the dynamic of the ongoing energy transition.” [World Energy Investment 2018] [Publication Landing Page] [IEA News Article on ‘World Energy Investment 2018’]