For the third consecutive year, global energy investment declined, to USD 1.8 trillion
(United States dollars) in 2017 – a fall of 2% in real terms. The power generation sector
accounted for most of this decline, due to fewer additions of coal, hydro and nuclear power
capacity, which more than offset increased investment in solar photovoltaics (PV). Several
sectors saw an increase in investment in 2017, including energy efficiency and upstream oil
and gas. Nevertheless, capital spending on fossil fuel supply remained around two-thirds of
that for 2014. The electricity sector was the largest recipient of global energy investment
for the second year running, reflecting the ongoing electrification of world’s economy and
supported by robust investment in networks and renewable power.
Falling costs continue to affect investment trends, prices and inter-fuel competition
across several parts of the energy sector. Unit costs for solar PV projects, which represent
8% of total energy investment worldwide, fell by nearly 15% on average, thanks to lower
module prices and a shift in deployment to lower-cost regions. Investment nonetheless
rose to a record level. Technology improvements and government tendering schemes are
facilitating economies of scale of new projects in some markets: in emerging economies
outside of the People’s Republic of China (hereafter, «China») the average size of awarded
solar PV projects rose by 3.5 times over the five years through 2017, while that of onshore
wind rose by half. Project economics in the oil and gas sector are complex, but costs for
conventional oil and gas developments have not followed the trend of higher oil prices
since mid-2016, thanks to cost discipline by operators and excess capacity in the services
industry. In the United States shale sector, however, an upswing in activity led to an almost
10% increase in costs in 2017, and a similar rise is expected in 2018. New digital
technologies are increasingly keeping costs under control across the entire energy sector,
including in upstream oil and gas.
China remained the largest destination of energy investment, taking over one-fifth of the
global total. China’s energy investment is increasingly driven by low-carbon electricity
supply and networks, and energy efficiency. Investment in new coal-fired plants there
dropped by 55% in 2017. The United States consolidated its position as the second-largest
investing country, thanks to a sharp rebound in spending in the upstream oil and gas sector
(mainly shale), on gas-fired plants and electricity grids. Europe’s share of global energy
investment was around 15%, with a boost in spending on energy efficiency and a modest
increase in renewables investment offset by declines in thermal generation. In India,
investment in renewable power topped that for fossil fuel-based power generation for the
first time in 2017.