Renewable energies are making their way into the world energy market. More and more countries are betting on renewables and less on fossil fuels. At least that is what a study presented in Madrid says, which shows that global energy investment fell by 12% in 2016, being the second consecutive year of decline.
The study has been prepared by IEA experts and is called Word Energy Investment. It contains a piece of information that reflects that investment in energy efficiency grew by 9%. Is it true that there is more and more energy efficiency and less fossil fuels?
Energy investment
The World Energy Investment 2017, of the International Energy Agency, presented yesterday at the headquarters of the Spanish Energy Club, analyzes the investments made in energy matters and their evolution over the past year in all fuels and all energy technologies.
This study has at other times examined the sources of investment in the energy sector around the world, as well as the expenditure that has been generated for research and development of energy efficiency and renewable energies.
There are many policies that exist regarding energy in all countries. But almost all of them have resulted in decline in investment in fossil fuels and an increase in energy efficiency in 2016. In addition, oil and gas companies are reinventing themselves as new technology arrives. This also causes the prices of the sector to vary and oscillate and trigger investment trends in the use of energy, increased performance and mitigation of climate change.
The IEA experts who participated in the presentation highlighted that the report provides a critical basis for decision-making and emphasized how investment decisions made today determine how energy supply and demand will develop tomorrow, being crucial for maintain energy security and achieve environmental objectives.
During 2016, world energy investment fell by 12%. Regarding the investments made in energy efficiency, we find an increase of 9% and electricity networks 6%. This sharp reduction in investment in oil, natural gas and coal was due to an improvement in energy efficiency and an increase in renewable energies.
However, the Agency expects investments in 2017 to stabilize compared to 2016.
The importance of China
As we know, 60% of the energy generated in all of China is through coal. Air pollution has risen to such high levels that an energy paradigm shift is necessary. Therefore, China has increased its investment in energy efficiency, as strong government policies have been established.
China was the country that invested the most in energy efficiency in 2016. It is the fastest growing region, accounting for 27% of global investment in 2016. At this rate, according to the IEA, China, where investments in coal fell 25% in 2016, it could surpass Europe, the largest investor to date in energy efficiency, in a few years.
Places for investment
Most of the amount invested globally in energy efficiency went to building improvements, including efficient appliances and heating. In addition, it has been destined more than 65.000 million US dollars went to R&D around the world in 2015. However, the amount spent on research and development in energy has not increased in the last four years, not even the share corresponding to renewable energy.
The United States saw a sharp drop in investments in oil and gas
Finally, China also surpasses Japan in research and development of new forms of energy and in increasing their efficiency, ranking first in terms of GDP.
As you can see, the world, albeit slowly, is heading towards an energy transition based on renewable energies and energy efficiency.