The International Energy Agency (IEA) has released a report showing that investment in new renewables has covered the global electricity demand in 2015.
The World Energy Investment Report explains a “reorientation of the energy system” with investments starting to divest from fossil fuels, which currently still dominate energy supplies.
According to the IEA, 2.4% of global GDP was invested in energy last year, which represents $1.8 trillion, half of which went to fossil fuels – mostly oil and gas – and 17% of which went to renewables – $300 billion.
Consequently, oil and gas prices dropped last year, causing investment in energy to go down by 8% year-on-year.
On the other hand, clean energy cost reductions, means that more capacity could be bought for the money invested in renewables which has been stable.
The report also shows that less money was invested in solar power compared with 2011 but cost reductions have added 60% more capacity.
The IEA says: “For the first time, investment in renewables-based capacity generates enough power to cover global electricity demand growth in 2015.”
IEA’s report concludes: “Globally, energy investment is not yet consistent with the transition to a low-carbon energy system envisaged in the Paris Climate Agreement reached at the end of 2015.”
Despite the rise of low-carbon sources of power and the decrease in fossil fuels investment, low-carbon investment will need to increase quicker in the next few years for the world to achieve its climate goals.