© OECD/IEA 2016© OECD/IEA 2016
London
14 September 2016

© OECD/IEA 2016
The context
 Investment is the lifeblood of the energy system, which determines
long-term trends of supply, emissions and fuel demand
 Investors face new challenges and opportunities from recent trends
 Macroeconomic uncertainty and structural change affects demand patterns
 The energy sector faces accelerated technological change
 Lower energy prices and increasing inter-fuel competition reshape investment
 Global energy investment declined in 2015, mainly due to lower oil
and gas spending
 Share of renewables in investment boosted by technology progress,
strong policy support and growth in good resource markets

© OECD/IEA 2016
Power
Generation
23%
Biofuels and Solar
Heat
1%
USD 1.8 trillion
Investment flows signal a reorientation of the
global energy system
An 8% reduction in 2015 global energy investment results from a $200 billion decline
in fossil fuels, while the share of renewables, networks and efficiency expands
Oil & Gas
46%
Coal 4%
Electricity
Networks
14%
Energy
Efficiency
12%
Global Energy Investment, 2015

© OECD/IEA 2016
Renewables
17%
USD 1.8 trillion
Investment flows signal a reorientation of the
global energy system
An 8% reduction in 2015 global energy investment results from a $200 billion decline
in fossil fuels, while the share of renewables, networks and efficiency expands
Oil & Gas
46%
Coal 4%
Electricity
Networks
14%
Energy
Efficiency
12%
Global Energy Investment, 2015
Thermal
Power
7%

© OECD/IEA 2016
USD (2015) billion
0 50 100 150 200 250 300 350
India
Russia
European
Union
United
States
China
Energy supply investment in 2015, selected markets
Top five markets comprised over half of global
energy supply investment
Boosted by record power sector spending, China regains its position as top
investment market, while the US declines due to sharply lower oil and gas investment

© OECD/IEA 2016
Energy efficiency investment rose 6%, bucking the
trend despite lower energy prices
Lower oil prices can reduce energy efficiency spending. But government policies
remain the key driver, a warning against complacency
Annual improvements in average fuel economy of new vehicles
0%
1%
2%
3%
US W. Europe China
2008 to 2013 2014 to 2015

© OECD/IEA 2016
0
100
200
300
400
500
600
700
800
900
2010
2011
2012
2013
2014
2015
2016
2017
USD(2015)billion
Unprecedented wave of investment cuts in
the upstream oil and gas industry
Global upstream capital spending 2010-2017
Cost deflation, efficiency improvements and reduced activity levels might lead
for the first time to three consecutive years of investment decline
-24%
-25%

© OECD/IEA 2016
The share of NOCs in global upstream
investment reaches an all time high
Share of upstream oil and gas investment, by company type
Upstream investment remains robust in the Middle East and Russia while North
American shale and global offshore spending have been hit most severely
10% 16%
8%
27% 21%
24%
27% 27%
24%
36% 36%
44%
0%
20%
40%
60%
80%
100%
2007 2014 2016
MajorsUS Independents NOCsOther private

© OECD/IEA 2016
Renewables investment buys much more electricity
Investment in renewables-based capacity more than covers 2015 global electricity
growth. Wind leads, surging 35% in 2015 on economics and record offshore growth
0
50
100
150
200
250
300
350
2011 2013 2015
USD (2015) billion
Hydropower Solar PV Wind Other renewables
0
50
100
150
200
250
300
350
400
2011 2013 2015
TWh
+33%
+0%
Global renewable power investment Generation from investment in capacity

© OECD/IEA 2016
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2010 2011 2012 2013 2014 2015
USD(2015)billion
0
50
100
150
200
250
300
2015
USD(2015)billion
In electricity networks, batteries accelerate
though grids comprise most investment growth
Global grid-scale battery storage investment Total networks investment
x10
0.4%
Grid-scale battery storage spending has expanded tenfold since 2010. Their value lies
most in complementing grids that constitute the bulk of investment

© OECD/IEA 2016
0
10
20
30
40
50
60
70
Gas Coal
2015(USD)billion
Subcritical
High
efficiency
Infrastructure investment cost for a 1 GW power plant in AsiaCoal and gas-fired power investment in Asian markets (2015)
Infrastructure costs favour coal power over
gas in Asian energy importers
Asian markets comprised 85% of global coal power investment, while N. America and
Middle East, with robust infrastructure, favoured gas for new fossil fuel power

© OECD/IEA 2016
0
200
400
600
800
1 000
1 200
Gas Coal
2015(USD)million
Infrastructure investment cost for a 1 GW power plant in Asia
Infrastructure costs favour coal power over
gas in Asian energy importers
Asian markets comprised 85% of global coal power investment, while N. America and
Middle East, with robust infrastructure, favoured gas for new fossil fuel power

© OECD/IEA 2016
Global nuclear investment remains robust
due to China
Economics and public concerns remain a challenge to significant
nuclear expansion
Nuclear construction starts, 2000-2015
0
2
4
6
8
10
12
14
16
18
20
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
GW
Rest of world China

© OECD/IEA 2016
Conclusions
 Global energy investment in 2015 is 8% lower. The share of oil & gas
declined, while that of renewables, efficiency and nuclear rose
 Massive cost deflation across the entire energy spectrum is
reshaping competition between fuels and technologies
 Unprecedented cuts in upstream investment are shifting the
geography of oil production
 Renewables investment accounts for more than two-thirds of power
generation and more than covers global electricity demand growth
 The IEA will continue to measure investment flows and assess their
implications for the global energy sector