1| World Energy Investment 2019 | IEA 2019. Al rights reserved.iea.org/wei2019World Energy Investment 20192| World Energy Investment 2019 | IEA 2019. Al rights reserved.The World Energy Investment WEI report is the world’s benchmark for tracking investment trends acros the energy sector. Now in its fourth edition, the report continues to enhance its role as a timely and valued analytical tol -with a new lok and fel -to help in decision making by governments, industry and the financial comunity alike. Our latest report emphasises the oportunities for the energy system to atract the scale and types of investment that would align with a more secure and sustainable energy system. It highlights some notable trends. In 2018, more than two dolars in every ten invested worldwide in energy goes towards powering Asian economies, while another dollar finances oil and gas suply in North America. There have been dramatic eforts to improve busines models, cut costs, and attract capital, yielding a more agile upstream industry, more cost-effective renewables investment and new ays to finance energy eficiency and electric mobility.Nevertheles, several mismatches are emerging betwen the curent trends and the capital neded ahead, requiring a harder lok at the risks facing investment acros different sectors and countries. Curent market and policy signals are not incentivising the major reallocation of capital to low-carbon power and eficiency that would align with a sustainable energy future. In the absence of such a shift, there is a growing posibility that investment in fuel supply wil also fal short of what is needed to satisfy growing demand. And to met sustainable development goals, more investment is neded in the regions that face the highest econoic and financial constraints, such as in sub-Saharan Africa.Financing our energy future requires policy makers to beter understand the risks faced by investors and to design and implement policies that alow for the eficient allocation and anagement of these risks, which are key determinants of the cost of capital. Where governments –and in some cases, public financial institutions –provide such frameworks, the private sector responds.Message from the cutive Director3| World Energy Investment 2019 | IEA 2019. Al rights reserved.All of this requires timely, reliable and authoritative data and analysis. That is why we are releasing WEI-2019 a ful two months earlier than last year, in a modernised igital forat that more effectively conveys the key ination. This is part of an updated investment portal that synthesises the Agency’s key insights on energy investment throughout the year. The WEI-2019package represents our latest step in suport of the ongoing digitalization of the IEA. Investment made today in energy infrastructure wil leave its ark for decades to come. Achieving the goals of the IEA Sustainable Developent Scenario wil require a combination of policy and financial know-how to increase the flow of bankable clean energy projects around the world. At the IEA we suport sound and sustainable policy making with god data, but also advice, training, and capacity building, to help achieve these aims.Dr Fatih BirolIEA cutive Director4| World Energy Investment 2019 | IEA 2019. Al rights reserved.Overview and key findingsEnergy investment by sectorEnergy investent by geographyImplications of today’s energy investment trendsEnergy end-use and eficiencyEnergy eficiency investmentTrends in end-use marketsFuel suplyInvestment in upstream oil and gasInvestment in oil and gas midstream and downstreamCoal suply investmentBiofuels investmentPower sectorOverview of power investment trendsImplications of power investmentCosts and project developmentFID trends for power generationNetworks and battery storageFinancing and funding trendsCros sector financing trends Trends in oil and gas financingTrends in power sector financingTrends in energy eficiency and distributed renewables financingTable of contents73549.8116...8..17..25..36..42..50..61.6..71..75...82.103...110..113..117..125...132..1485| World Energy Investment 2019 | IEA 2019. Al rights reserved.R for the moment, project aprovals are below the level neded to match robust demand. Energy eficiency spending was stable a second year in a row, with limited progres in expanding policy coverage. Despite soaring EV sales, transport eficiency has stagnated, while spending in buildings diped.Investment in coal suply increased by 2 –the first such rise since 2012 –although the total remains a long way below the peak levels reached at the start of the decade. Investment in renewable heat and transport edged down, but spending on new biofuels plants grew. Overview and key findings12| World Energy Investment 2019 | IEA 2019. Al rights reserved.Changing costs have reshaped the investment landscape in some areasCapital costs in selected energy-related sectors020406080101202010 2012 2014 2016 20182010 100Upstream oiland gasSolar PVutility-scaleOnshore windBaterystorageutility-scaleLEDsOverview and key findingsNote LEDs light-emiting diodes, PV photovoltaic. Capital costs reflect global weighted average costs of components or comissioned projects in a given sector.Source IEA analysis with calculations for solar PV and wind costs based on IRENA 2019.13| World Energy Investment 2019 | IEA 2019. Al rights reserved.Lower costs dampened the impact of les upstream spending since 2014Investment in upstream oil and gas –actual spend vs implied investment at constant 2018 cost levels010203040506007080902010 2012 2014 2016 2018USD 2018 billionActual investment010203040506007080902010 2012 2014 2016 2018Implied investment at constant 2018 costsOverview and key findings14| World Energy Investment 2019 | IEA 2019. Al rights reserved.while adjusted for costs, renewables investment is up 55 since 2010Investment in renewable power –actual spend vs implied investment at constant 2018 cost levelsOverview and key findings050101502025030350402010 2012 2014 2016 2018USD 2018 billionActual investment050101502025030350402010 2012 2014 2016 2018Implied investment at constant 2018 costs15| World Energy Investment 2019 | IEA 2019. Al rights reserved.01234562010 2012 2014 2016 2018Thermal power Renewable power All generationAverage power generation construction timecapacity weightedThere has ben a broad a shift towards projects with shorter lead timesTrends in project development and investment timelines for oil and gas suply and power generation 01234562010-2014 2015-2016 2017-2018yearsDeepwater Offshore shelf OnshoreAverage time to market for conventional oil and gas projectsyearsOverview and key findings16| World Energy Investment 2019 | IEA 2019. Al rights reserved.as industry seks to limit long-term risks in a changing energy systemIn recent years there has ben a broad shift in favour of projects with shorter construction times that limit capital at risk. For upstream oil and gas and power generation, the industry is bringing capacity to market on average more than 20 faster than at the start of the decade. This reflects beter project management and improved economics for shorter cycle technolgies as well as industry competition. In power, capital cost declines –reflecting technolgy progres and deployment location –have ben most evident in solar PV -75 since 2010, onshore wind -20 and batery storage -50. In ofshore wind, capital cost declines for comisioned projects have been les dramatic, but rising utilisation rates and lower financing costs have driven prices in auctions to new lows. After declining 30 over 2014-16, a slight rebound in upstream oil and gas costs in the last two years was lower than the increase in oil prices. With more spending on shale and faster time to market for conventional projects, the industry is now beter able to react to changing market conditions.In oil and gas and renewables, a dolar of investment buys more than in the past. Adjusting investment to 2018 cost levels shows a rising trend in spending activity for renewable power, up around 5 since 2010. For oil and gas, cost reductions have damped the impact of faling investment since 2014.Prices for some eficient gods, e.g. LEDs and electric vehicles, have continued to fal, and many energy efficient investments are already cost-effective with relatively short payback periods. Stil, policy, market, and financing-related chalenges have acted as barriers to increased spending on eficiency. Changes are not evident in al areas, with litle recent progres in improving costs or project cycles for nuclear; carbon capture, utilisation, and storage; building retrofits; and some large-scale grid projects.Overview and key findings17| World Energy Investment 2019 | IEA 2019. Al rights reserved.Energy investment by geographyCountry and regional trends 18-22Energy investment by income segment and population 23-24Overview and key findings18| World Energy Investment 2019 | IEA 2019. Al rights reserved.The United States accounted for most growth in energy suply investment thisdecadeChanges in energy supply investment, 2010-18Overview and key findings- 20- 150- 10- 50050102010-18USD 2018 billionChinaPower sector Fuel suply Net change in energy suply investment- 20- 150- 10- 50050102010-18Rest of World- 20- 150- 10- 50050102010-18United States19| World Energy Investment 2019 | IEA 2019. Al rights reserved.China remained the largest market for total energy investment in 2018Energy investment by sector in selected markets in 2018Overview and key findings0 50 10 150 20 250 30 350 40Southeast AsiaIndiaRusiaMidle EastEuropeUnited StatesChinaUSD 2018 billionFosil fuelsuplyPower sectorEnergyefficiencyRenewablesfor transportand heat20| World Energy Investment 2019 | IEA 2019. Al rights reserved.Investment in India has grown the most over the past three yearsEnergy investment by sector in selected markets, 2015 and 2018Overview and key findings05010150202503035040450USD 2018 billionRenewables fortransport/heatCoal suplyOil and gasEnergy EfficiencyElectricity networksRenewable powerThermal power2015 2018 2015 2018 2015 2018 2015 2018 2015 2018 2015 2018ChinaUnited StatesEurope IndiaSoutheastAsiasub-SaharanAfrica21| World Energy Investment 2019 | IEA 2019. Al rights reserved.More than two dolars in every ten invested in energy goes to powering Asian economies; another two dolars divides betwen oil and gas and power in North America. These shares have grown in recent years.The United States has ben responsible for most of the growth in energy supply investment this decade, with increases in both oil and gas, suported by more spending on shale, and in the power sector. While oil and gas spend has moderated somewhat in the past thre years even as it grew strongly from 2017 to 2018, that for elctricity networks rose. Copared to 2015, investment in renewable power and gas power remained relatively stable, but at high levels. Meanwhile, investment in energy eficiency has declined over the period.China remained the largest market for energy investment in 2018, but its lead narowed. While spending is increasingly driven by low-carbon electricity suply and networks, total investment declined by 7 over the past thre years due to lower spend on new coal-fired plants, down over 60, outweighing relatively high investment in renewable power and nuclear. Energy efficiency spending has risen by over 6 the past three years.Among major areas, energy investment has risen mostly rapidly in India the past three years, up 12. In 2018, renewable spending continued to exced that for fosil fuel-based power, supported by tendering for solar PV, and from 2017 wind, amid uncertain financial attractivenes of new coal power, though spending in coal suply rose somewhat. While transmision spending is expanding, investent in distribution has not grown. China, the United States Upper-midle income USD 3 896-12 05; Lower-midle to low-income USD 3 895.SourceIEA analysis with calculationsfor income and population are based on World Bank 2019.Overview and key findings0 250 50 750 1 00Lower-midleto low-incomeUpper-midleincomeHigh-incomeUSD 2018 billion2015201814 4244 414216Share of 2018 investmentShare of population24| World Energy Investment 2019 | IEA 2019. Al rights reserved.There is a strong link betwen income levels and energy investment. Nearly 90 of energy investment in 2018 was concentrated in high-and uper-midle income countries and regions. These areas also tend to benefit from relatively wel-developed financial systems se Financing and funding trends.High-income countries, with just over 15 of the global population, acounted for over 40 of energy investment in 2018. Investment in this group is down somewhat from five years ago, largely due to lower spending in Europe and Japan, but rose in 2018 with stronger spending in fuel suply and the power sector predominantly in the United States.Energy investment in recent years has also declined in upper-midle income countries and regions, with an increase in Mexico outweighed by fals in China, the Midle East, Brazil, the Rusian Federation, and some Southeast Asia countries. Thre years ago, this group comprised over 45 of energy investment.Lower-midle and low-income countries acounted for les than 15 of energy investment in 2018 despite containing wel over 40 of the world’s population. In recent years, the f