The International Energy Agency (IEA) on Wednesday said the global energy investment is on course to recover by nearly 10% to $1.9 trillion this year as countries emerge from the coronavirus pandemic. However, the Paris-based agency warned that more spending in the industry would fall far short of meeting global climate targets under the Paris Accord. In May, IEA released a report showing that to reach net-zero emissions by 2050, the world needs to approve no new oil and gas field developments except those already committed by this year.
IEA said more than $820 billion of the total investment would be earmarked for power, marking the sixth straight year of power investment outstripping oil and gas investment. IEA chairman Fatih Birol said the recovering investment is a welcomed signal, but he expected more investment to go toward renewables and clean energy technologies to reach net-zero emissions by 2050.
In last year’s report, IEA warned of the risk of underinvestment in oil and gas, which could create a supply and demand imbalance. This year, the agency forecast new investment in upstream oil and gas to increase by 10% but would remain below pre-pandemic levels. The agency also added that newly approved coal-fired plants this year are expected to decrease by about 80% from five years ago but would increase from last year.
