Investment in renewable power declined last year by its largest amount ever and is likely to keep falling this year, threatening global climate goals. Capital spending in renewable power generation fell 7 per cent in 2017 compared with the previous year, owing to declines in onshore wind and hydropower investment, according to a report from the International Energy Agency. The world’s leading energy watchdog reported that overall global energy investment dropped 2 per cent in the same period. Fatih Birol, the IEA’s executive director, said the declines in clean power and energy efficiency were “worrying”. “The current investment trends are insufficient both in terms of addressing security of supply concerns and environmental concerns,” Mr Birol told the Financial Times.
The IEA’s report shows that renewable power investment fell to $298bn in 2017 from $318bn in 2016, representing the biggest absolute drop since the agency started keeping track of clean power in 2000. Investments in energy efficiency measures — such as improving systems for heating, cooling and lighting so that buildings consume less power — also saw weaker growth than in previous years
After a brutal industry downturn, the IEA said energy companies had continued to prioritise cost control, financial discipline and returning cash to shareholders. This suggested that the industry was shifting towards so-called short-cycle projects, such as in US shale, which take less time to develop but can also suffer from steep price declines. This has raised fears that the global oil market could face a supply crunch. Financial Times