The global energy landscape is witnessing a decline in overall investment. This is evident from the latest World Energy Investment 2018 report by the International Energy Agency (IEA). According to the international authority on energy related matters, 2017 became the third consecutive year of falling energy investment with the exception of energy efficiency which saw some growth.
Out of the incurred investment, the lion’s share went towards the electricity sector which has been the top favourite for a second consecutive year followed by the oil and gas industry. An interesting trend to note is that state-backed investments are increasing in proportion to private sector investment in particular when it comes to oil and gas and thermal power.
The main reason for the dip in global energy investment was a sharp decline in the investment by Chinese state-owned enterprises in coal fired generation which fell by more than a third and investment in new coal-fired power plants dropped by 55 percent in2017. However, barring China, the role of SOEs especially in thermal power plants increased in emerging markets.
The same can be witnessed in Pakistan where the former PML-N government has put up coal based and R-LNG power plants under the China-Pakistan Economic Corridor (CPEC). According to the IEA report Vietnam, Egypt, Korea and Poland also saw similar trends of investment in coal and gas generation by the public sector.
China remains the leader when it comes to being the largest destination of energy investment with the country investing in low-carbon electricity supply and networks. As discussed previously in this space, the case for renewables investment has been highly positive globally. For example in India, the investment in renewable power beat that for fossil fuel based generation for the first time in 2017. However, Pakistan’s energy ministry remains aloof to the renewable potential with no clear direction or policy.
Another interesting fact in the report is the investment in energy efficiency which has bucked the overall downward trend in global investment. According to the report, almost USD236 billion was invested in energy efficiency across building, transport and industry in 2017.
But again, Pakistan continues to be woefully behind when it comes to energy efficiency and conservation. As Asad Mahmood of the National Energy Efficiency & Conservation Authority (NEECA) recently put it in an interview with this paper, saving one unit of energy is better than generation of three units. For paucity of space, other key findings from the report will be shared in the coming days.
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