Implications of power investment
The generation impact of low-carbon power investments (62)
Power investment compared with projections in IEA scenarios (63-65)
61 | World Energy Investment 2019 | IEA 2019. All rights reserved.
Power sector
Despite recent progress, the expected output from low-carbon power investments is not keeping pace with demand growth
Expected generation from low-carbon power investments compared to electricity demand growth
TWh
900
800
700
600
500
400
300
200
100
0
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
||
Solar PV & wind |
|
|
Hydro & other renewables |
|
|
Nuclear |
Demand growth |
|
|
|
|
||||
Note: Expected generation is based on the expected annualised output of the capacity associated with investment in a given year. TWh = terawatt hour. NPS = New Policies Scenario; SDS = Sustainable Development Scenario.
62 | World Energy Investment 2019 | IEA 2019. All rights reserved.
Power sector
Power investment in 2018 was lower than projected annual spending in the IEA scenarios
Global investment in the power sector by technology compared with investment needs in IEA scenarios
2018
Annual average 2025-30 (NPS)
Annual average 2025-30 (SDS)
0 |
200 |
400 |
600 |
800 |
1 000 |
1 200 |
1 400 |
USD (2018) billion
Coal power
Gas power
Oil power
Nuclear
Solar PV and wind
Hydro and other renewables
Grids and battery storage
63 | World Energy Investment 2019 | IEA 2019. All rights reserved.
Power sector
Across all regions, a boost in generation spending would be needed to support energy transitions, particularly in low-carbon sources
Power generation investment by region compared with annual investment needed in the SDS (2025-30)
billion |
180 |
|
160 |
||
USD(2018) |
||
120 |
||
|
140 |
|
|
100 |
|
|
80 |
|
|
60 |
|
|
40 |
|
|
20 |
|
|
0 |
2018 SDS |
2018 SDS |
2018 SDS |
2018 SDS |
2018 SDS |
2018 SDS |
|
China |
United States |
Europe |
India |
Southeast |
sub-Saharan |
|
Asia |
Africa |
|||||
|
|
|
|
Note: SDS = annual average investment from 2025-30 in the Sustainable Development Scenario.
Fossil fuel power
Nuclear
Renewables
64 | World Energy Investment 2019 | IEA 2019. All rights reserved.
Power sector
Overall, current investment in power is poorly aligned with future needs and challenges
Power investment was almost 15% below the average annual needs for 2025-30 as projected in the NPS but
over 35% less than the annual needs in the SDS. The 2018 data suggest a continued need for capital reallocation to meet energy security and sustainability goals, not only to bring in more low-carbon power but also to ensure that renewables-rich systems can operate
with sufficient flexibility.
In 2018, coal power investment, at under USD 60 billion, decreased 3% compared to previous year. This was still higher than the levels projected in IEA scenarios, with the largest differences found in Asia, particularly in
China, India, and Southeast Asia.
Spending on gas-fired generation in 2018 was also higher than projected in the scenarios, but by less than coal, a reflection of the flexibility value of gas in the power system. The largest difference was in the United
States. In Europe, where investment in thermal capacity of all types has slumped, gas power investment would need to rise (NPS) or be sustained (SDS).
Investment in nuclear power was only 3% less than the needs under the NPS but nearly 40% less than spending
required in the SDS, with the largest gaps in Europe, the United States, and China.
Renewables spending in 2018 was lower than projections under both scenarios – nearly 15% compared to the NPS but 50% compared with the SDS. While the largest gap is
seen in wind, more renewable spending would be needed across all technologies and geographies in the SDS, despite falling costs.
Investment in grids and battery storage was also lower than in both scenarios, by around 30%. Gaps were most
acute in areas with large electrification needs (e.g. India and sub-Saharan Africa), where utilities challenge to recover their fixed costs and set the adequate cost reflective tariffs.
65 | World Energy Investment 2019 | IEA 2019. All rights reserved.