Good, Bad and Ugly; World Energy Investment Outlook 2014

How can world invest wiser on energy? Problems, risks and opportunities in 2014-2035 world energy investment outlook.

 

Bad (I know, bad comes first here!)

According to IEA in World Energy Investment Outlook 2014, 80% of  upstream oil & gas investment offsets output declines at today’s fields. Also one-third of power generation investment is to replace plants that retire. Does it mean that world is at Energy Crisis?! (Call this the scope of the challenge) Would you expect that oil and gas sector and in a bigger picture the energy industry to invest more on Renewables? According to the report “Investment in Renewables rose from $60 billion in 2000 to a high point approaching $300 billion in 2011, before falling back since”, and this is only 18% of the world’s energy investment. More to notice is that the investment in Renewables has been flat over past 5 years. I classify this as strategic risk.

annual-energy-supply-investment

 

Good

A relief (to me) is to learn that the investment in energy efficiency is strong and will grow substantially (from $130b in 2013 to $550b in 2035). An excellent opportunity for SMEs to focus on. I call this the opportunity.

investment-in-energy-efficiency-upstream-strategy

 

Ugly

Share of NOCs in fossil based resources is about 75%. By 2035 this will only get worse. You can call this another strategic risk. Can emphasizing on Renewables be a risk mitigation?! Are we doing enough of it?

ownership-oil-gas-reserves-upstream-strategy

world energy investment outlook

 

The end of the story

How can we collectively make a nice ending to this story? How can industry (oil and gas, energy, transportation, who else?), policy makers and public work this out together? Your thoughts?

 

Read more:

World Energy Investment Outlook 2014 – Slides

World Energy Investment Outlook 2014 (complete report)

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