Global energy investment is set to rebound in 2021 led by renewable power generation. While overall investment will return to pre-pandemic levels, investment has shifted towards the power and end-use sectors and away from fuel production. Renewables accounted for 70% of power generation spending and investment in grids and storage is growing. Upstream oil and gas investment is increasing but remains below pre-crisis levels, with state-owned companies investing more counter-cyclically. Clean energy investment is rising moderately due to economic recovery packages, but is still well short of levels needed to meet climate goals.

1. World Energy Investment 2021
12th Clean Energy Ministerial Meeting, 02 June 2021
Michael Waldron, Head of Energy Investment Unit

2. IEA 2021. All rights reserved. Page 2
Global energy investment is set to rebound in 2021
While the volume of investment is expected to return to near the pre-crisis level, the composition of energy
investment has shifted towards the power and end-use sectors, and away from fuel production
Total global energy investment
500
1 000
1 500
2 000
2 500
2017 2018 2019 2020 2021E
Billion
USD
(2019)
Buildings
Transport
Industry
Energy infrastructure
Power generation
Fuel production

3. IEA 2021. All rights reserved. Page 3
Power, led by renewables, remains the largest part of supply spend
Global power investment is set to increase by around 5% in 2021, with renewables accounting for 70% of generation
spending, and rising spending on grids and storage, while midstream infrastructure grows fastest in fuel supply
Global energy supply investment by sector
100
200
300
400
500
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
2019
2020
2021E
Upstream Mid/down-
stream
Coal supply Low-
carbon
fuels
Renewable
power
Fossil fuel
power
Nuclear Electricity
networks
and battery
storage
Fuel supply Electricity
Billion
USD
(2019)
oil and gas
oil and gas

4. IEA 2021. All rights reserved. Page 4
Upstream investment is shifting towards state-owned companies
Upstream oil and gas investment is set to rise about 10% in 2021, but spending remains well below pre-crisis levels;
while cost control is pervasive, some NOCs are looking to invest counter-cyclically and gain oil and gas market share
Upstream spending by selected company types
20
40
60
80
100
120
140
160
2015 2016 2017 2018 2019 2020 2021E
Billion
USD
(2019)
Majors
Chinese NOCs
Russian
companies
Middle East
NOCs

5. IEA 2021. All rights reserved. Page 5
While coal is down, it is not out of the investment picture
While FIDs for coal-fired power plants are down 80% from 2015, there was an uptick in go-aheads for new plants in
2020, largely due to a lowering of restrictions in China as well as several projects elsewhere in Asia
Final investment decisions (FIDs) for new coal fired-power plants
20
40
60
80
100
2015 2016 2017 2018 2019 2020
GW
China India Southeast Asia Rest of world

6. IEA 2021. All rights reserved. Page 6
Clean energy investment is on a moderate upswing
The impact of stimulus plans is increasingly visible in buildings efficiency, low-carbon hydrogen and CCUS, while
electrification, especially EVs, remains a major driver; but, clean energy spend is well short of a sustainable recovery
Global investment in clean energy and energy efficiency
20%
25%
30%
35%
40%
45%
200
400
600
800
2017 2018 2019 2020 2021E
Billion
USD
(2019)
CCUS
Low-carbon fuels
Renewables for end-use
Energy efficiency and
electrification
Battery storage
Nuclear
Renewable power
% clean energy in total (right axis)

7. IEA 2021. All rights reserved. Page 7
Strong performance of clean energy in financial markets
Renewable power companies have outperformed fossil companies and the wider market, and sustainable finance has
boomed; but such trends have not spurred a corresponding acceleration of spending on clean energy projects
-50
0
50
100
150
200
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Arithmetic
return
(%)
RE Global
MSCI ACWI
FF Global
Global equity markets portfolio 10-year monthly returns: listed renewable power companies and fossil fuel companies
May

8. IEA 2021. All rights reserved. Page 8
Clean energy spend by oil and gas companies is starting to pick up
Emerging oil and gas company transition strategies include a wide range of approaches; project commitments for
2021 point to a share of capital investment in clean energy rising to more than 4%, if maintained through the year
Clean energy investments made by selected oil and gas companies, including data through May for 2021
1%
2%
3%
4%
5%
1
2
3
4
5
2015 2016 2017 2018 2019 2020
Billion
USD
(2019)
Other
Biofuels
CCUS
Offshore wind
Onshore wind
Solar PV
% total capex
2021
Jan-May

9. IEA 2021. All rights reserved. Page 9
Support for innovation is a key pillar of net-zero plans
Public spending on energy R&D continued to rise in 2020, with the share of low-carbon at 80%, but corporate
spending on energy R&D dropped by 2% as the pandemic weighed on budgets or led to underspending on projects
Spending on energy R&D by national governments
5
10
15
20
25
30
35
2015 2016 2017 2018 2019 2020
Billion
USD
(2019)
Rest of world
Japan, Korea, Australia,
New Zealand
Europe
North America
China

10. IEA 2021. All rights reserved. Page 10
Conclusions
• Global energy investment is set to rebound by around 10% in 2021, reversing most of the shock from
pandemic – but the composition of spending has shifted more towards power and end-use
• A shift in upstream oil and gas investment towards state-owned companies is raising the prospect of
greater market influence, or more risky assets in the future – depending on the speed of transitions
• Clean energy investment has been more resilient during the crisis and is set for a moderate upswing in
2021, with the impacts of recovery plans becoming more visible in some markets and sectors
• Despite strong momentum, climate pledges and sustainable finance are not, for the moment,
translating into an acceleration of clean energy capital spend at the scale needed to meet climate goals
• Meeting longer-term climate ambitions will depend on the evolution of corporate strategies, including in
traditional oil and gas, with support for innovation a key pillar of government net zero plans
• The gap between investment trends and a sustainable pathway is largest among emerging market and
developing economies – financing transitions in these areas is critical to meet climate goals

11. IEA 2021. All rights reserved. Page 11
The IEA’s role as an organiser of this event is facilitated through the CEM Investment and Finance Initiative (IF initiative), within the IEA’s Clean Energy Transitions in Emerging Economies programme,
which has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 952363