The world invested $1.8 trillion in energy last year, with spending on renewables stalling, while oil, gas and coal projects increased.
The International Energy Agency's World Energy Investment 2019 report shows overall global investment in energy stabilised in 2018 after a recent decline, with the power sector continuing to make up the biggest proportion of this spending. Much of that investment has been fueled by the world's rapidly increasing demand for electricity.
Investment in coal increased for the first time since 2012, despite reduced Chinese spending to focus on power generation.
When it comes to cleaner fuels, there was little movement in the overall investment in renewables and no net addition to capacity, driven in part by the falling costs of some technologies. But production of biofuels, which has fallen behind the IEA's sustainable development targets, saw a rise in investment last year.
The agency's report also showed minimal increases in energy efficiency investments, with spending on transport efficiency remaining constant even though sales of electric vehicles are motoring upwards.
Indeed, the IEA warns there is a "growing mismatch between current trends and the paths to meeting" the world's climate goals laid out in the 2016 Paris Agreement and "other sustainable development goals."
The changing landscape
The costs of technologies are reshaping energy-related investment, as the chart below demonstrates.
Some of the most marked changes have been seen in the power sector, where there have been dramatic falls in the costs of solar, onshore wind and battery storage.
Prices for some efficient goods such as light-emitting diodes (LED) and electric vehicles have continued to fall, too. But investment in efficiency innovations is still being held back by governmental policy and financing challenges.
On the other hand, there has been little change in the costs of nuclear power projects and carbon capture and storage – a technology that aims to trap greenhouse gases before they enter the atmosphere.
Who invests the most?
China remained the biggest market for energy investment last year, even as the US is rapidly catching up, the IEA report said.
Increases in oil and gas -- particularly in the shale sector -- have driven the bulk US investment. By contrast, China is putting much of its money into low-carbon projects, with big investments in nuclear power and renewables.
India is the most rapidly growing market for investment. Elsewhere, investment in energy generally has fallen in recent years in Europe, the Middle East, Southeast Asia and sub-Saharan Africa, according to the agency.