IEA work on investment in context of climate change mitigation
o Since 2016, the IEA has published an annual World Energy Investment report
o Covers all aspects of the energy system, including energy efficiency
o Puts trends in fossil fuels alongside trends in low carbon
o Policy makers and industry can benchmark objectives against reality
o Next edition: July 2018
o Tracking Clean Energy Progress covers annual trends in clean energy sectors
o This year will improve the coverage of investments in energy innovation
o Next edition: May 2018
o World Energy Outlook estimates investment needs of scenarios to 2040
o Covers end-use and supply-side investments
o Has a scenario consistent with a 2°C trajectory and has also looked at “below
o Next edition: November 2018
The following analysis draws mostly on World Energy Investment 2017
and World Energy Outlook 2017
Overall global energy investment fell 12%, a second consecutive year of decline
Total energy investment was $1.7 trillion in 2016. Electricity sector investment overtook oil and gas for
the first time, while energy efficiency was the biggest growth sector.
Global energy investment 2016
Oil & gas
Electricity Oil, gas & coal
transport and heat
Coal power investment
In 2016, sanctioning of new coal power fell to the lowest level in nearly 15 years, hampered by competition
from renewables and environmental challenges. Gas power FIDs exceeded those for coal by over 1.5 times.
Average annual final investment decisions for new coal-fired power capacity
2001-2005 2006-10 2011-15 2016
Rest of world
Global average actual
Investment in clean power is not keeping pace with demand
The contribution of new solar PV and wind has grown nearly three-quarters in the past five years, but FIDs for
nuclear and hydropower have slowed. Clean power FIDs in 2016 generate at only two-thirds of demand growth.
Expected annual power generation from final investment decisions
2012-13 2014-15 2016
Nuclear Hydropower & other renewables Wind Solar PV Average power demand growth (2012-16)
Networks spending is dominated by lines and power equipment, but digital grid infrastructure now
accounts for over 10% of networks investment.
Smarter networks can be key enablers to address flexibility
Investment in digital grid infrastructure and total electricity networks spending
2014 2015 2016
Physical backbone Power equipment Smart meters Smart grid infrastructure EV chargers
Average emissions from new power plants need to reach 100 kg/MWh by 2030 to be "on track".
On average, power plants are becoming cleaner, but….
Estimated average CO2 intensity of new power plants coming online
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
kg CO2 per MWh
Despite investors’ climate commitments, oil majors still attract cash
Investment in oil majors remains attractive given high dividend yields. The stakes of the top 20 shareholders in
the oil majors increased 24% to 27% 2014-17. Some of these companies have climate commitments.
2014 Increase 2014-17 Decrease 2014-17
Oil majors’ top 20 shareholders