The 2021 Global Energy Investment Report released by the International Energy Agency (IEA) pointed out that with the gradual recovery of the economy from the new epidemic, the global energy demand is expected to rebound significantly, thus driving the related investment growth.
1. Global energy investment is expected to rebound by 10% in 2021
In 2021, the global energy investment is expected to increase to 1.9 trillion US dollars, which is nearly 10% higher than that in 2020, reversing the sharp decline caused by the epidemic and bringing the total investment back to the pre-epidemic level. However, the main composition of investment has shifted to the power and end-use sectors, rather than the traditional fuel production.
2. Driven by the strong growth of renewable energy expenditure, electricity continues to account for the largest share of energy supply investment
Renewable energy investment is booming in the market with perfect supply chain. In these markets, the cost is low, the regulatory framework provides predictability of cash flow, and lenders and financiers with deep understanding of these industries are looking for sustainable projects to support them. The demand for clean electricity in the enterprise sector has also played a role in achieving sustainable development goals. In 2020, most of the investment will be concentrated in a few markets, especially in China, where wind power investment will increase significantly. The same situation also occurs in the United States and Europe. In 2020, the capital investment of power industry is higher than that of oil and gas supply for the fifth consecutive year.
3. Policy is still the main driving force for the growth of energy investment.
Energy efficiency expenditure will increase by nearly 10% in 2021. However, in the context of relatively low fuel prices, the growth is mainly concentrated in markets and sectors explicitly supported by policies, such as the construction sector in Europe. The expenditure of policy and economic stimulus plan is promoting the project development in new fields such as low carbon hydrogen and carbon capture, utilization and storage (CCUS).
At the beginning of 2021, the investment in low-carbon energy innovation generally showed a positive trend. Major economies emphasize innovation and increase capital investment as part of their plans to achieve zero net emissions. By 2030, a total of more than 50 billion US dollars of public funds can be used for major demonstration projects of large-scale low-carbon energy technologies, including CCUS and other methods to reduce industrial emissions.
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