The International Energy Agency (IEA) on Wednesday said global energy investments fell by 8% to $1.8 trillion in 2015.
The fall was primarily due to the drop in oil and gas upstream sector even as investments were robust in green energy sources, electricity networks and energy efficiency. The global energy investments were to the tune of $2 trillion in 2014.
This comes in the backdrop of depressed crude oil prices. The renewable energy investments of $313 billion accounted for the largest source of power sector investment.
While China emerged as the highest global energy investor, the US witnessed a fall in its energy sector investments.
“With energy supply spending of $315 billion, China was once again the world’s largest energy investor last year thanks to robust efforts in building up low-carbon generation and electricity networks, as well as implementing energy efficiency policies,” IEA said in a statement.
“Investment in the US energy supply declined to about $280 billion in 2015, falling nearly $75 billion, due to low oil prices and cost deflation, representing half of the total decline in global energy spending,” the statement added.
This also comes at a time when India’s energy production is stagnant. As per BP Global data, India has emerged as the third largest consumer of crude oil with a consumption of 4.2 million barrels per day (mbpd) for calendar year 2015, after the US (19.39 mbpd) and China (11.96 mbpd). India overtook Japan which consumed 4.15 mbpd.
“We see a broad shift of spending toward cleaner energy, often as a result of government policies,” said IEA executive director Fatih Birol in the statement.
The Narendra Modi-led National Democratic Alliance government has set a target of 175 gigawatt of renewable energy projects by 2022. Also, the National Institution for Transforming India (Niti) Aayog will shortly come up with a national energy policy. The policy will form the basis of India’s energy security paradigm and focus on clean energy resources such as solar and natural gas.
“Our report clearly shows that such government measures can work, and are key to a successful energy transition. But while some progress has been achieved, investors need clarity and certainty from policymakers. Governments must not only maintain but heighten their commitment to achieve energy security and climate goals,” Birol added.
India last week deferred to ratify the Paris Agreement at the G20 talks in China as the domestic capacity is being built up. India pledged at the United Nations Climate Change Conference in Paris last year to lower its carbon emissions and move towards cleaner sources of energy.
“The investment in renewable power capacity in 2015 generates more than enough to cover global electricity demand growth,” the report said.
Of India’s installed power generation capacity of 304,761 megawatt (MW), coal forms the mainstay of the fuel mix with a 61% share or 186,293MW. Renewable sources contribute 44,237MW to the installed base.
India wants to improve its per capita electricity consumption of 1,010 kilowatt-hour (kWh). In comparison, China and developed economies have a per capita consumption of 4,000 kWh and 15,000 kWh, respectively.
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Source: firstname.lastname@example.orgNew Delhi