London, United Kingdom: According to a press release issued by the International Energy Agency (IEA), the global energy investment fell by eight per cent in 2015, with a drop in oil and gas upstream spending outweighing continued robust investment in renewables, electricity networks and energy efficiency.

According to World Energy Investment 2016 (WEI 2016), the total investment in the energy sector reached USD 1.8 trillion in 2015, down from USD 2.0 trillion in 2014, the press release revealed.

The new annual report, the press release highlighted, provides a comprehensive and detailed picture of the current investment landscape across fuels, technologies and countries. The report, the press release said, shows that the energy system is undergoing a broad reorientation toward low-carbon energy and efficiency, but investment in key clean energy technologies needs to be further ramped up to put the world economy on track for climate stabilisation.

With energy supply spending of USD 315 billion, China, the report noted, was once again the world’s largest energy investor last year thanks to robust efforts in building up low-carbon generation and electricity networks, as well as implementing energy-efficiency policies.

Investment in the United States’ energy supply, the report said, declined to about USD 280 billion in 2015, falling nearly USD 75 billion, due to low oil prices and cost deflation, representing half of the total decline in global energy spending. The report mentioned that the Middle East and Russia emerged as the most resilient regions to spending cuts thanks respectively to lower production costs and currency movements. As a result, national oil companies accounted for 44% of overall upstream investments, an all-time high, it added.

According to the report, renewable energy investments of USD 313 billion accounted for nearly a fifth of total energy spending last year, establishing renewables as the largest source of power investment. While spending on renewable power capacity was flat between 2011 and 2015, the report highlighted that electricity generation from the new capacity rose by one-third, reflecting the steep cost declines in wind turbines and solar PV. The investment in renewable power capacity in 2015 generates more than enough to cover global electricity demand growth, it added.

The Agency report observed that global gas-fired power generation investment declined by nearly 40%, while Asian markets continued to favour investment in coal power. It further said that investment activity in European gas power remained muted despite large retirements anticipated in the next decade.

“We see a broad shift of spending toward cleaner energy, often as a result of government policies,” said Fatih Birol, Executive Director of IEA. “Our report clearly shows that such government measures can work, and are key to a successful energy transition. But while some progress has been achieved, investors need clarity and certainty from policy makers. Governments must not only maintain but heighten their commitment to achieve energy security and climate goals.”