The electricity sector attracted the largest share of energy investments in 2017, surpassing the oil and gas industry for the second year in row, International Energy Agency (IEA) said today.
"The electricity sector attracted the largest share of energy investments in 2017, sustained by robust spending on grids, exceeding the oil and gas industry for the second year in row, as the energy sector moves toward greater electrification," it said.
After several years of growth, combined global investment in renewables and energy efficiency dropped by three per cent in 2017 and there is a risk that it will slow further this year, it said.
"For instance, investment in renewable power, which accounted for two-thirds of power generation spending, dropped 7 per cent in 2017. Recent policy changes in China linked to support for the deployment of solar PV raise the risk of a slowdown in investment this year," it said.
Global energy investment totalled USD 1.8 trillion in 2017, a two per cent decline in real terms from the previous year, according to the IEA's World Energy Investment 2018 report.
More than USD 750 billion went to the electricity sector, while USD 715 billion was spent on oil and gas supply globally.
State-backed investments are accounting for a rising share of global energy investment, as state-owned enterprises have remained more resilient in oil and gas and thermal power compared with private actors.
The share of global energy investment driven by state-owned enterprises increased over the past five years to over 40 per cent in 2017.
Meanwhile, government policies are playing a growing role in driving private spending.
Across all power sector investments, more than 95 per cent of investment is now based on regulation or contracts for remuneration, with a dwindling role for new projects based solely on revenues from variable pricing in competitive wholesale markets, IEA said.
"Investment in energy efficiency is particularly linked to government policy, often through energy performance standards," it added.
While energy efficiency showed some of the strongest expansion in 2017, it was not enough to offset the decline in renewables, it said.
Moreover, efficiency investment growth has weakened in the past year as policy activity showed signs of slowing down, it added.
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