EU NEIGHBOURS. On 27 May, the International Energy Agency (IEA) released its report World Energy Investment 2020. The report focuses on the impact of the COVID-19 pandemic on energy security and clean energy transitions worldwide. According to the report, the pandemic has set in motion the largest drop in global energy investment in history, with spending expected to plunge in every major sector this year – from electricity to renewables and energy efficiency.
The overall share of global energy spending that goes to clean energy technologies – including renewables, efficiency, carbon capture, utilisation and storage – has been stuck at around one-third in recent years. Power sector spending is on course to decrease by 10% in 2020, with worrying signals for the development of more secure and sustainable power systems.
IEA Executive Director Fatih Birol said, “Electricity grids have been a vital underpinning of the emergency response to the health crisis.” He further added, “These networks have to be resilient and smart to ward against future shocks but also to accommodate rising shares of wind and solar power. Today’s investment trends are clear warning signs for future electricity security.”
Energy efficiency, a central pillar of clean energy transitions, is suffering too. Estimated investment in efficiency and end-use applications is set to fall by an estimated 10–15% as vehicle sales and construction activity weaken and spending on more efficient appliances and equipment is dialled back.
“The historic plunge in global energy investment means lost energy supply that we might well need tomorrow once the economy recovers. The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems,” said Mr Birol.
