Global energy investment has stabilised at $1.8tn after three years of decline, according to the World Energy Investment 2019 report by the International Energy Agency (IEA).

The IEA found that the power sector received the most investment in 2018 with just under $800bn, exceeding oil and gas for the third year in a row, despite investment in power declining by 1% compared with 2017, mainly due to China reducing spending on coal and solar. Oil and gas investment rose by 1% due to higher oil prices, while coal investment grew by 2%, rising for the first time since 2012.

The report noted a significant fall in capital costs of renewable sources of energy. Solar photovoltaic (PV) costs fell by 75% since 2010, onshore wind costs fell by 20% and battery storage costs fell 50%.

China remained the largest market for energy investment in 2018 but its lead is narrowing. Investment in the country has fallen by 7% in the last three years due to a 60% reduction on coal power plant funding, which outweighed increased spending in renewable and nuclear power. Europe’s investment also fell by 7% in the same period, but low-carbon energy rose to almost 60% of its total.

Total investment has risen slightly in the US due to spending on shale oil along with renewable energy remaining stable. India had the most rapid rise from 2015, with a 12% increase in funding over the time period.

The IEA comments that energy investment is ‘misaligned’ and out of step with the world’s future energy needs. This is especially noticeable with low-carbon energy, which the IEA note has stalled and needs a ‘rapid boost’ to meet targets set by the Paris Climate Agreement.

Low-carbon energy investment was $620bn in 2018 but would need to grow by 250% and its share of world energy investment to rise from 35% to 65% by 2030 to meet sustainability goals.

Summarising the report, IEA executive director Fatih Birol tweeted: “A worrying trend. Combined investments in renewables, efficiency, nuclear, batteries & other low-carbon tech are stuck at around 1/3rd of global energy investments. If we want to reach our climate targets, this share needs to be 2/3rds. That’s a key message of our report. […]

“Whichever way you look, we are storing up risks for the future. Government leadership is critical to reduce them.”