Global energy investment fell by 12 percent in 2016, the second consecutive year of decline, according to the International Energy Agency’s (IEA) annual World Energy Investment report.
This is due to the fact that increased spending on energy efficiency and electricity networks was more than offset by a continued drop in upstream oil and gas spending, according to the report.
Global energy investment amounted to $1.7 trillion in 2016, or 2.2 percent of global GDP.
“For the first time, spending on the electricity sector around the world exceeded the combined spending on oil, gas and coal supply. The share of clean-energy spending reached 43 percent of total supply investment, a record high,” said the report.
China, the world’s largest energy investor, saw a 25 percent decline in coal-fired power investment last year and is increasingly driven by clean electricity generation and networks, as well as energy efficiency investment, according to the IEA.
“The United States saw a sharp decline in oil and gas investment, and accounted for 16 percent of global spending. India was the fastest-growing major energy investment market, with spending up 7 percent thanks to a strong government push to modernize and expand the power sector,” said the report.
After two years of unprecedented decline, IEA expects global upstream oil and gas investment to stabilize in 2017.
“However, an upswing in US shale spending contrasts with stagnation in the rest of the world, signalling a two-speed oil market. At the same time, the oil and gas industry overall is transforming itself by delivering large cost savings and focusing more on technology development and efficient project execution,” said the report.
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