Investments in electricity surpassed those in oil and gas for the first time ever in 2016 on a spending splurge on renewable energy and power grids as the fall in crude prices led to deep cuts, the International Energy Agency (IEA) said on Tuesday.
Total energy investment fell for the second straight year by 12 percent to .7 trillion in 2016, compared with 2015, the IEA said. Oil and gas investments plunged 26 percent to 0 billion, down by over a quarter in 2016, and electricity generation slipped 5 percent.
"This decline [in energy investment] is attributed to two reasons," IEA chief economist Laszlo Varro told journalists.
"The reaction of the oil and gas industry to the prolonged period of low oil prices which was a period of harsh investment cuts, and technological progress which is reducing investment costs in both renewable power and in oil and gas," he said.
Oil and gas investment is expected to rebound by 3 percent in 2017, driven by a 53 percent upswing in U.S. shale and spending in Russia and the Middle East, the IEA said in a report.
Electricity investment worldwide was 8 billion, lifted by higher spending in power grids which offset the fall in power generation investments.
"Investment in new renewables-based power capacity, at 7 billion, remained the largest area of electricity spending, despite falling back by 3 percent," the report said.
China led the world in energy investments with 21 percent of global total share, the report said, driven by low-carbon electricity supply and networks projects.