IEA Forecasts a $3.4 Trillion Energy Investment Boom

Global energy investment is set to jump to $3.4 trillion this year, the International Energy Agency said today, noting that the rise will be driven by countries’ efforts to address the second energy crisis in less than five years. Of the global total, $2.2 trillion is expected to be spent on electricity, including grids, storage, nuclear, wind, solar, and efficiency, the agency said, with the balance of $1.2 trillion to be poured into oil and gas, as well as coal. Interestingly, the IEA sees crude oil investment specifically declining this year, for the third year in a row, to $500 billion, despite the price surge triggered by the war in the Middle East. Natural gas investment, on the other hand, is seen surging to $330 billion, which would be the highest annual total investment in gas in ten years, the IEA said. Yet investments in solar power are expected to top this, reaching $365 billion in 2026. Total investments in what the IEA calls renewable power are estimated to reach $665 billion. “We are in the midst of the largest energy security crisis the world has ever faced – and I believe this will reshape investment strategies globally, with parallels to the major changes the energy world witnessed after the oil shocks of the 1970s,” IEA’s secretary-general Fatih Birol said. “We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources – such as advancing new pipelines and other supply infrastructure, on the one hand, and turning more to domestically available resources, on the other,” Birol added. These efforts include a surge in interest in Canadian oil and gas, and plans by the United Arab Emirates’ national oil company ADNOC to double the capacity of its oil pipeline to Fujairah as soon as next year as a means of bypassing the Strait of Hormuz.