The International Energy Agency (IEA) has released a startling report that says that to meet our growing energy, we would need a global spend of US$48tn to reach usage estimates by 2035.
According to the agency, today’s annual investment in energy supply of US$1.6tn needs to rise steadily over the coming decades towards $2tn while an annual spending on energy efficiency, measured against 2012’s figures, needs to rise from the current figure of US$130bn to more than US$550bn by 2035.
Data compiled from different sources associated with the IEA have indicated that since 2000, the world’s various governments have actually contributed significantly to driving change towards cleaner fuels with estimates showing annual investment in new fuel and electricity supply has more than doubled while investment in renewable sources of energy has quadrupled, particularly from the European Union where renewable energy investments has been higher than investment in natural gas production in the United States.
Renewables, along with biofuels and nuclear power, now account for approximately 15pc of its annual investment flows, with a similar share also going to the power transmission and distribution network.
Of the cumulative global investment bill to 2035 of US$48tn in the report’s main scenario, around US$40tn is in energy supply and the remainder is tied up in energy efficiency.
“Risk of shortfalls”
However, current projections see us falling well below our goals for achieving lower levels of carbon emissions with the IEA report suggesting $53tn in cumulative investment in energy supply and in energy efficiency is required by 2035 to get the world onto a 2C reduced emissions path.
IEA executive director Maria van der Hoeven said of the report: “The reliability and sustainability of our future energy system depends on investment. But this won’t materialise unless there are credible policy frameworks in place as well as stable access to long-term sources of finance. Neither of these conditions should be taken for granted.
“There is a real risk of shortfalls, with knock-on effects on regional or global energy security, as well as the risk that investments are misdirected because environmental impacts are not properly reflected in prices.”