IEA says $48 trillion energy investment needed to 2035
The International Energy Agency said the world needs $48 trillion in investment to meet its energy needs to 2035.
In a special report issued June 3, the IEA said today’s annual investment in energy supply of $1.6 trillion needs to rise steadily over the coming decades towards $2 trillion to meeting soaring energy demand.
Meanwhile, annual spending on energy efficiency, measured against a 2012 baseline, needs to rise from $130 billion today to more than $550 billion by 2035.
Accurate pricing is key to making sure that investment gets to where it’s needed, according to the report.
IEA Maria van der Hoeven said: “There is a real risk of shortfalls, with knock-on effects on regional or global energy security, as well as the risk that investments are misdirected because environmental impacts are not properly reflected in prices.”
Of the cumulative global investment bill to 2035 of $48 trillion in the report’s main scenario, around $40 trillion is in energy supply and the remainder in energy efficiency. Of the investment in energy supply, $23 trillion is in fossil fuel extraction, transport and oil refining; almost $10 trillion is in power generation, of which low-carbon technologies – renewables ($6 trillion) and nuclear ($1 trillion) – make up the lion’s share; and a further $7 trillion in transmission and distribution.
More than half of the energy-supply investment is needed just to keep production at today’s levels, that is, to compensate for declining oil and gas fields and to replace power plants and other equipment that reach the end of their productive life.
The $8 trillion of investment in energy efficiency is concentrated in the main consuming markets, the European Union, North America and China: 90% is spent in the transport and buildings sectors.