4 vital insights from the World Energy Investment Report
In its inaugural annual report on global energy investments, the International Energy Agency (IEA) found that while fossil fuels still provide a majority of energy worldwide, the tide is turning to favour renewables. But are current levels of investment in clean energy enough to keep global warming below the crucial two degrees celsius threshold?
It’s clear that oil is still king...for now
Last year, total global energy investment amounted to US $1.8 trillion. Around half of this sum went toward the extraction and distribution of fossil fuels, primarily oil and gas. In contrast, renewable energy made up 17 percent of global energy spend. However, the report says that the the shifting direction of investment flows indicates a “reorientation” of our energy system.
Renewables are the future
Renewable energy investments amounted to $313 billion in 2015, making up one-fifth of total energy spending, and cementing renewables as the single largest source of power investment. What’s more, investment in renewable energy generated enough power to cover global electricity demand growth last year.
China led the way
Coal demand has declined as China, the world’s largest energy investor, increasingly opts to install renewable capacity. In fact, the country’s renewable investments made up 60 percent of its spending on power projects. Over 80 percent of the world’s nuclear investments were also made in China.
Investment in clean energy remains inadequate
Ultimately, the IEA found energy investment has not yet lined up with the goal of the Paris climate agreement: to keep global temperature increase to a maximum of two degrees celsius. The report claims that wind, solar and PV investments are on a trajectory consistent with reaching emissions targets — while other renewable technologies are lagging behind.
“We are seeing real action in dollar terms but it is not yet enough,” IEA Executive Director Fatih Birol told the Financial Times. “It makes me happy that the numbers show governments can change the direction of investment. But we need to triple efforts to meet the Paris targets.”
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.