A report from the International Energy Agency (IEA) has revealed that renewable energy investments of $313bn accounted for nearly a fifth of total energy spending in 2015, which decreased 8% from 2014.
While global energy investment in 2014 stood at $2.0 trillion, in 2015, the number declined to $1.8 trillion in 2015. The reduction in energy investment was mainly in the areas of fossil fuels such as coal, oil and gas.
Expenditure on fossil fuels made up 55% of the global energy investment in 2015. The number was 61% in 2014.
The report said that though there was not a significant increase of investment in the renewable sector between 2011 and 2015, yet the continued cost reduction in photovoltaics and wind turbines resulted in increase of energy production to about 33%.
The report also noted that the investment in renewable sector in 2015 generated more than enough power to meet the rising demand of electricity globally.
Apart from renewable sources, investment in energy storage mechanisms was also significant. Technology innovations played crucial role in increasing investments in smart grids and storage systems and they are also expected to be important for integrating wind and solar energy sources to the grid.
Investment in grid scale battery storage increased ten times since 2010 and this field is expected to grow with much larger investments coming in.
Investment in energy efficiency also saw an increase of 6% in 2015, mainly due to the change in governmental policies such as minimum standards covering a rising share in new buildings, appliances and motor vehicles.
Gas-fired power generation saw a global decline of 40%. In Europe, gas power remained muted and large retirements of gas powered plants are expected in the next decade. Asian markets have still favoured investing in coal power
Country-wise, China has been the largest investor in energy in the world in 2015, with $315bn being spent. The country has also been appreciated for its efforts to build robust, low-carbon energy generation, electricity networks and implementing energy efficiency policies.
Energy expenditure of US stood at $280bn in 2015 and there was a decline of $75bn compared to 2014. Energy spending in US fell due to low oil prices and cost deflation that represent half of the total decline in global energy spending.
IEA executive director Fatih Birol said: “We see a broad shift of spending toward cleaner energy, often as a result of government policies.
“Our report clearly shows that such government measures can work, and are key to a successful energy transition. But while some progress has been achieved, investors need clarity and certainty from policy makers.
"Governments must not only maintain but heighten their commitment to achieve energy security and climate goals.”