Global energy investment to plunge 20% this year: IEA

Global energy investment to plunge 20% this year: IEA”

The IEA said the decline in investment is "staggering in both its scale and swiftness" and will impact every major sector, from fossil fuels such as oil, gas and coal to renewable sources including wind and solar power.

At the beginning of the year, spending across all energy sectors were on track to grow by around 2%.

Dr Birol said: "The historic plunge in investment is deeply troubling".

However, the slump in investment may not turn out to be proportional to the demand shock, and the lead times associated with energy investment projects mean that the impact of today's cutbacks on energy supply (or demand, in the case of efficiency) will be felt only after a few years, when the world may be well into a post-recovery phase.

The Guardian says that falling energy demand, lower prices and a rise of non-payment of bills will mean energy revenues going to governments and energy companies drop by more than $1tn this year.

Global energy companies have cut investments and shelved projects to shore up their finances due to the crisis. But, given this share is relative to plummeting levels of fossil fuel investment, the IEA emphasised that "in absolute terms, it remains far below the levels required to accelerate energy transitions".

Global investment in oil and gas was expected to fall by nearly 30% with the shale industry already under pressure set for a halving of expenditure as investor confidence and access to capital dry up.

The world's investment in the energy sector is projected to plummet by a record-high 20% year-on-year (y-o-y) in 2020 as a outcome of the energy crisis and the Covid-19 pandemic outbreak, the Sputnik news agency quoted the International Energy Agency (IEA) as saying today.

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Mobility and aviation are leading the drop in oil investment which account for 60% of global oil demand. But now investment is estimated to plummet by $400 billion, or 20%, compared to 2019 levels, Kallanish Energy reports.

USA pressure led to a landmark global deal with Opec, Russia and other oil producers cutting supplies by about 10 percent, or 15 million barrels per day.

Despite proving more resilient than fossil fuels, investment in renewables looks set to be heavily hit by COVID-19 as investment in the energy sector plunges to lowest level in history.

Covid-19 changed that expectation quickly, according to the IEA's World Energy Investment 2020 report.

The report, World Energy Investment 2020, has therefore urged world countries to drive a doubling of renewable investment this decade, helping reverse a flatlining aggravated by the COVID-19 outbreak.

He added: "The crisis has brought lower emissions but for all the wrong reasons. Today's investment trends are clear warning signs for future electricity security". Energy efficiency, another central pillar of clean energy transitions, is suffering too. So too are the policy response to the crisis and, crucially, the extent to which energy investment and sustainability concerns are baked into recovery measures.

Decisions to appoint brand-new coal-fired plants are down greater than 80% because 2015, however the global coal fleet remains to expand.

Based on available data and announced projects, approvals of new coal plants in the first quarter of 2020, mainly in China, were running at twice the rate observed over 2019 as a whole, found the report.

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