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IEA 2019. All rights reserved.
World Energy
Investment 2019
Energy Supply and Investment Outlooks Division
iea.org/wei2019
IEA
2IEA 2019. All rights reserved.
0
100
200
300
400
500
600
700
800
900
1 000
Power sector Oil & gas supply Energy efficiency Coal supply Renewables for
transport and heat
USD(2018)billion
Energy investment remained at over USD 1.8 trillion in 2018. A rise in fossil fuel supply investment offset lower
power and stable efficiency spend. Despite the shift, power was the largest sector for the third year in a row.
Global energy investment in 2018 and change compared to 2017
Global energy investment stabilised in 2018 after 3 years of decline
Networks
Renewable
power
Fossil-fuel
power
Upstream
Downstream
midstream &
refining
Buildings
Industry
Transport
Nuclear
Battery
storage
-1%
+1%
+2%
-1%
Stable
3IEA 2019. All rights reserved.
0
100
200
300
400
500
United States China
USD(2018)billion
Fossil fuel supply Power sector Energy efficiency Renewables for transport/heat
2016
0
100
200
300
400
500
United States China
2018
In the past two years, energy investment in the United States has been catching up with China, mainly
due to oil and gas supply and electricity networks, while China’s power sector spending has fallen.
The United States saw the largest investment growth in 2018
0
100
200
300
400
500
United States China
USD(2018)billion
2016
0
100
200
300
400
500
United States China
2018
Energy investment in the United States and China, 2016 vs 2018
4IEA 2019. All rights reserved.
Lower income areas (e.g. sub-Saharan Africa) receive around 15% of investment, but are over 40% of
the world’s population. A rebalancing of spending is essential to meet sustainable development goals.
Energy investment is concentrated in more developed regions
Share of 2018
investment
Share of
population
Energy investment by income group
Energy investment and population by region, classified by income level
0 250 500 750 1 000
Lower-middle to
low-income
Upper-middle
income
High-income
USD (2018) billion
14% 42%
44% 41%
42% 16%
5IEA 2019. All rights reserved.
0
1
2
3
4
5
6
2010-14 2015-16 2017-18
Years
Deepwater Shallow water Onshore
In upstream oil & gas and power generation, industry is bringing capacity to market 20% faster than at
the start of the decade. In a changing energy system, industry seeks to better manage capital at risk.
A preference for projects that deliver more quickly
Average time to market for
conventional oil and gas projects
0
1
2
3
4
5
6
2010 2012 2014 2016 2018
Thermal power Renewable power
All generation
Average power generation construction time
(capacity weighted)
Trends in project timelines for oil and gas supply and power generation
6IEA 2019. All rights reserved.
Today’s capital allocation would need to shift rapidly towards cleaner sources and electricity networks
in order to align with the Sustainable Development Scenario and the Paris Agreement.
Energy supply investment needs to rise, whatever the scenario
Fuel supply = 50% Power = 50%
Fuel supply = 50% Power = 50%
Fuel supply = 35% Power = 65%
0 500 1 000 1 500 2 000
Annual
average
2025-30
(SDS)
Annual
average
2025-30
(NPS)
2018
USD (2018) billion
Oil supply
Gas supply
Coal supply
Biofuels for transport
Fossil fuel power
Nuclear
Renewable power
Electricity networks
& battery storage
Global energy supply investment compared with annual average investment needs 2025-30 by IEA scenario
2018
New Policies Scenario (NPS)
Sustainable Development Scenario (SDS)
7IEA 2019. All rights reserved.
Decisions to sanction new oil & gas projects have picked up slightly, and could rise further in 2019, but
remain short of what would be required if demand continues to grow strongly.
Decision time for new oil and gas projects
0
5
10
15
20
25
2011 2012 2013 2014 2015 2016 2017 2018 NPS SDS
Billionboe
Crude oil
2011 2012 2013 2014 2015 2016 2017 2018 NPS SDS
Gas
Annual avg.
2018-25
Annual avg.
2018-25
Crude oil and gas conventional resources sanctioned
8IEA 2019. All rights reserved.
After two years of subdued project approvals, a bullish outlook for gas demand is encouraging
companies to consider the sanctioning of additional LNG plants.
World LNG liquefaction capacity by country/region
The logjam of new LNG project approvals has been broken
0
10
20
30
40
50
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Q1
bcmperyear
Europe Russia North America Africa Australia Others
Sanctioned capacity by FID year
9IEA 2019. All rights reserved.
Final investment decisions (FIDs) for coal-fired generation and net additions to capacity
Investment decisions for new coal-fired generation are down 80% from 2010 and retirements of older
plants are higher than ever, but the world still added almost 10 GW to its coal-fired fleet in 2018.
Coal power investments are down, but the global fleet is still growing
GW
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018
Developing Asia Rest of World - 40
- 20
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016 2017 2018
Final investment decisions Net additions to capacity
10IEA 2019. All rights reserved.
0
100
200
300
400
500
600
700
800
900
2013 2014 2015 2016 2017 2018
TWh
Expected new generation from
low-carbon power investment
Solar PV & wind Hydro & other renewables Nuclear
0
100
200
300
400
500
600
700
800
900
2018 NPS
Annual avg.
2025-30
SDS
Annual avg.
2025-30
USD(2018)billion
Investment in low-carbon power
Demand growth
The output expected from investment in renewable & nuclear power levelled off in 2018 while demand
growth soared. To meet sustainability goals, spending on renewable power would need to double.
Low-carbon investment is not keeping pace with power demand
Expected generation from low-carbon power investments and annual investment needs by scenario
11IEA 2019. All rights reserved.
Renewables investment based on corporate PPAs jumped by one-third in 2018; scaling spending to
cover a greater share of commercial & industrial demand suggests tapping into a larger pool of buyers.
A growing role for corporate PPAs in renewables investment
Renewable power investment based on corporate power purchase agreements (PPAs)
0
4
8
12
16
2010 2012 2014 2016 2018
USD(2018)billion
United States Mexico Europe
Australia India Other
Renewable power investment
based on corporate PPAs
0
100
200
300
Cumulative
investment
Investment level
that would account for
10% of C&I demand
Renewable power investment based on corporate PPAs
(US and Europe)
12IEA 2019. All rights reserved.
Energy efficiency spending was stable a second year in a row, with limited progress in expanding policy
coverage. Despite soaring EV sales transport efficiency has stagnated, while spending in buildings fell.
Investment growth in energy efficiency has stalled
Global investment in energy efficiency by region
0
50
100
150
200
250
300
2015 2016 2017 2018
USD(2018)billion
Other
Other Asia Pacific
China
Europe
North America
13IEA 2019. All rights reserved.
0,00%
0,02%
0,04%
0,06%
0,08%
0,10%
2014 2015 2016 2017 2018E
%ofGDP
While public energy RD&D spending rose modestly in 2018, led by the United States and China, most
countries are not spending more of their economic output on energy research.
Public energy RD&D spending is not expanding enough
Spending on energy RD&D (research development & demonstration) by national governments, and as share of GDP
0,00%
0,02%
0,04%
0,06%
0,08%
0,10%
2014 2015 2016 2017 2018E
%ofGDP
All major economies
0
5
10
15
20
25
30
2014 2015 2016 2017 2018E
USD(2018)billion
Rest of World Japan, Korea, Australia, NZ Europe United States China
14IEA 2019. All rights reserved.
Early-stage VC investment in energy tech start-ups reached USD 6.9 billion, mostly focused on low-
carbon; China overtook the US in terms of total deal value, though more deals were for US companies.
A record year for venture capital investment in clean energy
Global venture capital investment in energy technology companies
0
1
2
3
4
5
6
7
8
Avg. 2007-11 2012 2013 2014 2015 2016 2017 2018
USD(2018)billion
Other energy
Other clean energy
Energy efficiency
Other renewables
Bioenergy
Solar
Transport
15IEA 2019. All rights reserved.
Conclusions
• Energy investment stabilised in 2018 due to a bounce back in spending on oil,
gas & coal supply while low-carbon (supply & demand) investment stalled
• Company strategies are reacting to technological change & unprecedented
uncertainties by focusing on projects that deliver returns more quickly
• Approvals of new conventional oil & gas projects are falling short of what would
be needed to meet continued robust demand growth
• There are few signs of the major shift of capital towards efficiency, renewables &
innovative technologies that is needed to turn emissions around
• Investment & financing decisions are shaped by policies: today’s frameworks are
not yet fit to avoid multiple risks for the future
16IEA 2019. All rights reserved.
www.iea.org
IEA

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World Energy Investment Launch Presentation - 14th May 2019

  • 1. IEA 2019. All rights reserved. World Energy Investment 2019 Energy Supply and Investment Outlooks Division iea.org/wei2019 IEA
  • 2. 2IEA 2019. All rights reserved. 0 100 200 300 400 500 600 700 800 900 1 000 Power sector Oil & gas supply Energy efficiency Coal supply Renewables for transport and heat USD(2018)billion Energy investment remained at over USD 1.8 trillion in 2018. A rise in fossil fuel supply investment offset lower power and stable efficiency spend. Despite the shift, power was the largest sector for the third year in a row. Global energy investment in 2018 and change compared to 2017 Global energy investment stabilised in 2018 after 3 years of decline Networks Renewable power Fossil-fuel power Upstream Downstream midstream & refining Buildings Industry Transport Nuclear Battery storage -1% +1% +2% -1% Stable
  • 3. 3IEA 2019. All rights reserved. 0 100 200 300 400 500 United States China USD(2018)billion Fossil fuel supply Power sector Energy efficiency Renewables for transport/heat 2016 0 100 200 300 400 500 United States China 2018 In the past two years, energy investment in the United States has been catching up with China, mainly due to oil and gas supply and electricity networks, while China’s power sector spending has fallen. The United States saw the largest investment growth in 2018 0 100 200 300 400 500 United States China USD(2018)billion 2016 0 100 200 300 400 500 United States China 2018 Energy investment in the United States and China, 2016 vs 2018
  • 4. 4IEA 2019. All rights reserved. Lower income areas (e.g. sub-Saharan Africa) receive around 15% of investment, but are over 40% of the world’s population. A rebalancing of spending is essential to meet sustainable development goals. Energy investment is concentrated in more developed regions Share of 2018 investment Share of population Energy investment by income group Energy investment and population by region, classified by income level 0 250 500 750 1 000 Lower-middle to low-income Upper-middle income High-income USD (2018) billion 14% 42% 44% 41% 42% 16%
  • 5. 5IEA 2019. All rights reserved. 0 1 2 3 4 5 6 2010-14 2015-16 2017-18 Years Deepwater Shallow water Onshore In upstream oil & gas and power generation, industry is bringing capacity to market 20% faster than at the start of the decade. In a changing energy system, industry seeks to better manage capital at risk. A preference for projects that deliver more quickly Average time to market for conventional oil and gas projects 0 1 2 3 4 5 6 2010 2012 2014 2016 2018 Thermal power Renewable power All generation Average power generation construction time (capacity weighted) Trends in project timelines for oil and gas supply and power generation
  • 6. 6IEA 2019. All rights reserved. Today’s capital allocation would need to shift rapidly towards cleaner sources and electricity networks in order to align with the Sustainable Development Scenario and the Paris Agreement. Energy supply investment needs to rise, whatever the scenario Fuel supply = 50% Power = 50% Fuel supply = 50% Power = 50% Fuel supply = 35% Power = 65% 0 500 1 000 1 500 2 000 Annual average 2025-30 (SDS) Annual average 2025-30 (NPS) 2018 USD (2018) billion Oil supply Gas supply Coal supply Biofuels for transport Fossil fuel power Nuclear Renewable power Electricity networks & battery storage Global energy supply investment compared with annual average investment needs 2025-30 by IEA scenario 2018 New Policies Scenario (NPS) Sustainable Development Scenario (SDS)
  • 7. 7IEA 2019. All rights reserved. Decisions to sanction new oil & gas projects have picked up slightly, and could rise further in 2019, but remain short of what would be required if demand continues to grow strongly. Decision time for new oil and gas projects 0 5 10 15 20 25 2011 2012 2013 2014 2015 2016 2017 2018 NPS SDS Billionboe Crude oil 2011 2012 2013 2014 2015 2016 2017 2018 NPS SDS Gas Annual avg. 2018-25 Annual avg. 2018-25 Crude oil and gas conventional resources sanctioned
  • 8. 8IEA 2019. All rights reserved. After two years of subdued project approvals, a bullish outlook for gas demand is encouraging companies to consider the sanctioning of additional LNG plants. World LNG liquefaction capacity by country/region The logjam of new LNG project approvals has been broken 0 10 20 30 40 50 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Q1 bcmperyear Europe Russia North America Africa Australia Others Sanctioned capacity by FID year
  • 9. 9IEA 2019. All rights reserved. Final investment decisions (FIDs) for coal-fired generation and net additions to capacity Investment decisions for new coal-fired generation are down 80% from 2010 and retirements of older plants are higher than ever, but the world still added almost 10 GW to its coal-fired fleet in 2018. Coal power investments are down, but the global fleet is still growing GW 0 20 40 60 80 100 120 2010 2011 2012 2013 2014 2015 2016 2017 2018 Developing Asia Rest of World - 40 - 20 0 20 40 60 80 100 120 2010 2011 2012 2013 2014 2015 2016 2017 2018 Final investment decisions Net additions to capacity
  • 10. 10IEA 2019. All rights reserved. 0 100 200 300 400 500 600 700 800 900 2013 2014 2015 2016 2017 2018 TWh Expected new generation from low-carbon power investment Solar PV & wind Hydro & other renewables Nuclear 0 100 200 300 400 500 600 700 800 900 2018 NPS Annual avg. 2025-30 SDS Annual avg. 2025-30 USD(2018)billion Investment in low-carbon power Demand growth The output expected from investment in renewable & nuclear power levelled off in 2018 while demand growth soared. To meet sustainability goals, spending on renewable power would need to double. Low-carbon investment is not keeping pace with power demand Expected generation from low-carbon power investments and annual investment needs by scenario
  • 11. 11IEA 2019. All rights reserved. Renewables investment based on corporate PPAs jumped by one-third in 2018; scaling spending to cover a greater share of commercial & industrial demand suggests tapping into a larger pool of buyers. A growing role for corporate PPAs in renewables investment Renewable power investment based on corporate power purchase agreements (PPAs) 0 4 8 12 16 2010 2012 2014 2016 2018 USD(2018)billion United States Mexico Europe Australia India Other Renewable power investment based on corporate PPAs 0 100 200 300 Cumulative investment Investment level that would account for 10% of C&I demand Renewable power investment based on corporate PPAs (US and Europe)
  • 12. 12IEA 2019. All rights reserved. Energy efficiency spending was stable a second year in a row, with limited progress in expanding policy coverage. Despite soaring EV sales transport efficiency has stagnated, while spending in buildings fell. Investment growth in energy efficiency has stalled Global investment in energy efficiency by region 0 50 100 150 200 250 300 2015 2016 2017 2018 USD(2018)billion Other Other Asia Pacific China Europe North America
  • 13. 13IEA 2019. All rights reserved. 0,00% 0,02% 0,04% 0,06% 0,08% 0,10% 2014 2015 2016 2017 2018E %ofGDP While public energy RD&D spending rose modestly in 2018, led by the United States and China, most countries are not spending more of their economic output on energy research. Public energy RD&D spending is not expanding enough Spending on energy RD&D (research development & demonstration) by national governments, and as share of GDP 0,00% 0,02% 0,04% 0,06% 0,08% 0,10% 2014 2015 2016 2017 2018E %ofGDP All major economies 0 5 10 15 20 25 30 2014 2015 2016 2017 2018E USD(2018)billion Rest of World Japan, Korea, Australia, NZ Europe United States China
  • 14. 14IEA 2019. All rights reserved. Early-stage VC investment in energy tech start-ups reached USD 6.9 billion, mostly focused on low- carbon; China overtook the US in terms of total deal value, though more deals were for US companies. A record year for venture capital investment in clean energy Global venture capital investment in energy technology companies 0 1 2 3 4 5 6 7 8 Avg. 2007-11 2012 2013 2014 2015 2016 2017 2018 USD(2018)billion Other energy Other clean energy Energy efficiency Other renewables Bioenergy Solar Transport
  • 15. 15IEA 2019. All rights reserved. Conclusions • Energy investment stabilised in 2018 due to a bounce back in spending on oil, gas & coal supply while low-carbon (supply & demand) investment stalled • Company strategies are reacting to technological change & unprecedented uncertainties by focusing on projects that deliver returns more quickly • Approvals of new conventional oil & gas projects are falling short of what would be needed to meet continued robust demand growth • There are few signs of the major shift of capital towards efficiency, renewables & innovative technologies that is needed to turn emissions around • Investment & financing decisions are shaped by policies: today’s frameworks are not yet fit to avoid multiple risks for the future
  • 16. 16IEA 2019. All rights reserved. www.iea.org IEA