The International Energy Agency (IEA) expects the world’s investment in the energy sector to grow by nearly 10% to $1.9 trillion in 2021 after a record drop last year, according to the IAE’s fresh report released on Wednesday.
The agency projected a 20% year-on-year decrease in 2020 — the highest drop on record — that was triggered by the energy crisis and the outbreak of the coronavirus pandemic.
“In 2021, annual global energy investment is set to rise to USD 1.9 trillion, rebounding nearly 10% from 2020 and bringing the total volume of investment back towards pre-crisis levels. However, the composition has shifted towards power and end-use sectors – and away from traditional fuel production,” the World Energy Investment 2021 report read.
Global power sector investment is set to grow by 5% this year to over $820 billion, with renewables further dominating investment and amounting to 70% of a total of $530 billion spent on all new generation capacity, the IEA said.
“Upstream oil and gas investment is expected to rise by about 10% in 2021 as companies recover financially from the shock of 2020, but spending remains well below pre-crisis levels,” the reports added.
The agency also noted that this year would be the sixth in a row when capital spending in the power sector would be higher than for oil and gas supply.