The Covid-19 pandemic has set in motion the largest drop in global energy investment in history.
That’s according to the International Energy Agency (IEA), which outlined that spending is expected to “plunge” in every major sector this year, including fossil fuels and renewables.
Global energy investment is now anticipated to fall by 20 percent, or almost $400 billion, compared to last year, the IEA highlighted. At the start of 2020, investment was on track for growth of around two percent, according to the IEA, which noted that this would have been the largest annual rise in spending in six years.
Global investment in oil and gas is expected to decline by almost one third in 2020 and investment in shale is anticipated to drop by 50 percent this year.
If investment stays at 2020 levels in oil markets, it would reduce the previously expected level of supply in 2025 by almost nine million barrels a day, the IEA outlined. The organization said this would create a clear risk of tighter markets if demand starts to move back towards its pre-crisis trajectory.
“The historic plunge in global energy investment is deeply troubling for many reasons,” Fatih Birol, the IEA’s executive director, said in an organization statement.
“It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers,” he added.
“The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems,” Birol continued.
As of May 28, there have been 5.59 million confirmed cases of Covid-19 globally, with 353,334 deaths, according to the latest figures from the World Health Organization (WHO). The Americas have seen the most confirmed cases at 2.55 million, as of May 28, WHO data shows.
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