The inaugural annual report on global energy investments from the International Energy Agency reveals investments in renewables made up nearly a fifth of total energy spending last year.
World Energy Investment 2016 states renewables were the largest source of power investment. Spending on renewable power capacity additions may have been flat between 2011 and 2015, but electricity generation from the new capacity rose by around 33% as steep reductions in the cost of solar PV and wind turbines provided more bang for buck.
The report says investment in renewable power capacity last year generates more than enough electricity to cover demand growth.
With regard to grid-scale battery storage, investment increased tenfold since 2010.
Fossil fuels are showing signs of increasingly losing their grip, but their claws are still well and truly sunk in. Fossil fuels (including supply and electricity generation) made up 55% of 2015 global energy investment, slipping significantly from 61% in 2014. The share of renewables increased from 16% to 17%.
On the electricity generation front specifically, it’s a very different story. Spending reached USD 420 billion last year, with renewables accounting for about 70% of the total. In the USA, renewable electricity investment accounted for almost 90% of generation; and in the UK, more than 85%.
While an unstoppable energy transition may well be under way, IEA Executive Director Fatih Birol says governments must not only maintain but increase their commitment to achieve energy security and climate goals.
The IEA’s report points out that although power generation capacity coming online last year would have a 420kgCO2/MWh average carbon intensity (compared to 530 kgCO2/MWh for the existing fleet), it’s still a long way off from the 100 kgCO2/MWh average required from operating plants in 2040 for the 2°C climate target.
“Globally, energy investment is not yet consistent with the transition to a low-carbon energy system envisaged in the Paris Climate Agreement reached at the end of 2015,” states the report.
Another statistic that would worry some – nuclear capacity additions attained their highest level in over two decades (10GW).
Further facts and figures from World Energy Investment 2016 can be accessed here (PDF