Watch: World Energy Investment 2017 report from IEA

According to IEA‘s latest report global energy investment fell by 12% in 2016, the second consecutive year of decline, as increased spending on energy efficiency and electricity networks was more than offset by a continued drop in upstream oil and gas spending.

Total energy investment worldwide in 2016 was just over $1.7 trillion, accounting for 2.2% of global GDP. Investment was down by 12% compared to IEA’s revised 2015 energy investment estimate of $1.9 trillion.

Spending in energy efficiency rose by 9% while spending in electricity networks rose by 6%, yet these increases were more than offset by a continuing drop in investment in upstream oil and gas, which fell by over a quarter, and power generation, down 5%. Falling unit capital costs, especially in upstream oil and gas, and solar photovoltaics (PV), was a key reason for lower investment, though reduced drilling and less fossil fuel-based power capacity also contributed.

The report also stated that Energy investment in India jumped 7%, cementing its position as the third-largest country behind the United States, owing to a strong government push to modernise and expand India’s power system and enhance access to electricity supply. The rapidly growing economies of Southeast Asia together represent over 4% of global energy investment.

Despite a sharp decline in oil and gas investment, the share of the United States in global energy investment rose to 16% – still higher than that of Europe, where investment declined 10% – mainly as a result of renewables.

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