IEA says clean energy investment 'stalled' in 2016

Global investment in energy dropped in 2016, according to an International Energy Agency (IEA) report. Although renewables have become cheaper, clean energy rollout has nevertheless "stalled" on lower investments in hydro and nuclear, the report - World Energy Investment 2017 - says.

The world invested $1.7 trillion in energy developments last year, led by China, the USA and India, in that order, while some 94% of money spent globally is in regulated markets.

Investment in electricity dropped by 1% compared to 2015, mainly due to the lowering cost of renewable capacity that meant investors saw better value for money. Renewables investment was down 3% on five years ago, but capacity additions were 50% greater and expected output from these new renewables was 35% higher.

With China spending 25% less on new coal plants in 2016 and the IEA predicting a "dramatic slowdown ahead for coal power investment once the current wave of construction comes to an end", renewables were the major category of electricity investment. However, "even though the contribution of new wind and solar PV to meeting demand has grown by around three-quarters over the past five years", said the IEA, "the expected generation from this ... is almost entirely offset by the slowdown in nuclear and hydropower investment decisions". This means the "sanctioning" of new low-carbon generation has stalled, it added.

Although ten new reactors were connected to the grid in 2016, a 25-year record, only three officially started construction, which heralds a slowdown in coming years from last year's rate of build.

Commenting in last month's World Nuclear Performance Report 2017 from the World Nuclear Association, the organisation's director-general Agneta Rising said, "More must be done to ensure this contribution grows as it will need to over coming decades in order to meet the Harmony goal of 25% of electricity by 2050." At present nuclear power provides about 10.6% of electricity.

New dynamics

The IEA raised concerns about energy security: "Continuous investment in flexible assets to ensure system adequacy during periods of peak demand and to help integrate higher shares of wind and solar PV capacity into the system is essential."

In tandem the global energy system saw $1 billion in investment in battery storage for the first time last year. And $47 billion was spent on "infrastructure and software directed towards digitising the electricity sector to facilitate more flexible network operation, demand management and integration of renewables", said the IEA. Meanwhile grid operators spent some 10% of their investment in "modernising and moving from a pure electricity delivery business to an integrated platform for data and services, enabled by rapid progress in digital information and communications".

Researched and written
by World Nuclear News