Daily Management Review

IEA expects global energy investment cuts


Global energy investment in 2020 will fall by one fifth (20%), or almost $ 400 billion, compared to 2019 due to the COVID-19 pandemic. It will be the largest decline in history, according to a new annual report by the International Energy agency World Energy Investment 2020 (WEI 2020).

The oil industry will feel the strongest decline in investments (32%) compared to 2019, the IEA notes. "According to our estimates, in 2020, oil spending will fall by more than $ 1 trillion, while electricity sector revenues will fall by $ 180 billion," the agency said. In general, investments in the oil and gas industry in annual terms will be reduced by one third in 2020, the agency predicts. "This has already caused an increase in borrowing, as well as the likelihood that the cost restriction will continue in 2021," the IEA said.

"The spread of the COVID-19 pandemic has exceeded expectations, and currently in 2020 the largest reduction in energy investments in history is expected, a reduction of one fifth or almost $ 400 billion in capital expenditures compared with 2019," the IEA said. At the same time, at the beginning of the year, it was expected that global investment in energy could grow by 2% in 2020, which would be the highest growth since 2014, the agency notes.

According to the IEA, investment in the coal industry in 2020 will decrease by 15% compared to 2019, the electricity sector - by 10%. The IEA also expects historic changes in 2020 as electricity becomes the most cost-intensive consumer spending on energy.

source: reuters.com