World energy investment 2025

Despite elevated geopolitical tensions and economic uncertainty, this tenth edition of the IEA’s World Energy Investment shows that capital flows to the energy sector are set to rise in 2025 to USD 3.3 trillion, a 2% rise in real terms on 2024. Around USD 2.2 trillion is going collectively to renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification, twice as much as the USD 1.1 trillion going to oil, natural gas and coal. Open questions about the economic and trade outlook means that some investors are adopting a wait-and-see approach to new project approvals, but we have yet to see significant implications for spending on existing projects.

Rapid growth in spending on energy transitions over the past five years was kicked off by post-pandemic recovery packages and then sustained by a variety of economic, technology, industrial and energy security considerations, not only by climate policies. Some 70% of the increased spending came from
net fossil fuel importers. This was led by China’s drive to reduce reliance on oil and gas imports and exert leadership in new technology areas; Europe’s push to accelerate spending on renewables and efficiency gains after Russia’s full-scale invasion of Ukraine and the consequent cut to pipeline gas deliveries; and a pickup in spending on solar in India. Another 20% of the increase came from the United States, where supportive policies were motivated in part by the desire to challenge China’s position in emerging clean
technology supply chains. Emissions reductions provide a powerful reason to invest, but are often not the primary driver for investment in technologies that are increasingly mature and cost-competitive.

source:
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