The International Energy Agency (IEA) has this week warned that investment in global energy will fall by $400bn (£324bn) this year, the biggest slump in the industry’s history. In a report, World Energy Investment 2020, the IEA said the unprecedented investment slump follows the most severe plunge in energy demand since the second world war. The group added that the decline in investment is “staggering in both its scale and swiftness” and will impact every major sector, from fossil fuels such as oil, gas and coal to renewable sources including wind and solar power.
IEA Executive Director Fatih Birol, said: “If we are to achieve a lasting reduction in global emissions, then we will need to see a rapid increase in clean energy investment. The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.” He added: “The crisis has brought lower emissions but for all the wrong reasons.”
Responding to the IEA’s report, Glennmont Partners CEO Joost Bergsma, said:
“The IEA’s World Energy Investment report poses a stark warning to energy investors as we look to refocus and rebuild our economies following the COVID-19 pandemic.
Like other investment companies in clean energy, Glennmont are sensitive to the COVID-19 developments. However we believe that the long-term opportunities presented by the switch to renewable energy generation remains steadfast. The climate crisis has not gone away and will remain a long-term chronic problem, rather than a short-term acute one. Equally, the infrastructure that creates greenhouse gases has not been decommissioned, merely put on standby while we deal with the current crisis.
In the medium-to-long term we expect the deployment of renewable technologies to sustain its strong upward trajectory for growth on a global level. However, as a sector we must ensure the financial recovery, once the coronavirus pandemic ends, is matched by the commitment of world leaders to tackle climate change by decarbonising their economies. The best time to make the structural changes necessary is at the bottom of the curve – not when the direction of travel of recovery has been established.”