Nearly half of the decline was accounted for by the US, where plunging oil prices and a recent boom in shale gas, along with cost deflation in the energy sector, have played an increasing role.

China remained the world’s biggest investor in energy worldwide, with $315bn spent in 2015, despite a slowing in the pace of its headlong economic growth.

Despite falls overall, investment in renewable energy in 2015 remained robust, according to the International Energy Agency, the global energy watchdog, which amassed the data. The move towards clean energy was driven by government policies, with countries pursuing low-carbon growth.

About $313bn was invested in renewable and other low-carbon forms of energy last year, representing about a fifth of total energy spending. Much of it was in electricity generation, in which renewable power takes the lion’s share of available investment funds. This has been further aided by steep falls in the cost of wind turbines and solar panels.

By contrast, investment around the world in gas-fired power generation, touted as a transition technology between coal-fired power generation and renewables, fell by close to 40%.

The investment figures show the mood before the landmark agreement on climate change reached in Paris last December. Under that accord, nearly 200 countries agreed to hold global temperature rises to no more than 2C above pre-industrial levels.

This will entail curbs to greenhouse gas emissions from all the world’s major economies, developed and developing, and meeting these targets will require new policies to favour low-carbon energy above fossil fuels. Such actions should mean further boosts to clean energy sources in years to come.

The IEA, in the report World Energy Investment 2016, found that the world’s energy systems were undergoing “a broad reorientation” promoting low-carbon energy sources and greater energy efficiency. But the organisation said that investment in these must be ramped up much further if the aims embraced in Paris were to be achieved.

Fatih Birol, executive director of the agency, said: “We see a broad shift of spending towards cleaner energy. Government measures can work and are key to a successful energy transition. But while progress has been achieved, investors need clarity and certainty from policymakers. Governments must not only maintain, but heighten, their commitment to achieve energy security and climate goals.”

However, his emphasis on renewable forms of power generation was disputed by Benjamin Sporton, chief executive of the World Coal Association. He said that the continuing use of coal, especially in Asia where most new coal-fired power stations are being built, showed the need for massive new investment in carbon capture and storage (CCS) facilities, which barely figure in today’s investments.

He said: “In many countries, coal is the logical low-cost power choice, particularly in Asia. To assume that fossil fuels will not be required or can be substituted in the next few decades is likely to lead to cheaper, less efficient coal technology being deployed, threatening the ability to deliver global climate objectives. It is critical that energy investment is directed towards all forms of low-carbon technology. Policy parity for CCS is essential if we are to achieve the best outcomes possible.”

Fiona Harvey

This article first appeared on the Guardian

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