The world’s transition to cleaner sources of energy is gaining speed as the coronavirus pandemic accelerates a shift in investment away from fossil fuels, according to the International Energy Agency.
Capital spending on energy this year is set to plunge by 18%, as global energy demand is expected to fall by 5% in 2020, a pullback not seen since World War II, the Paris-based agency said in its annual report on the future of the industry.
But the projected investment cuts are highly uneven, highlighting a divergence in what companies, markets and investors are willing to finance. Spending on new oil and gas supplies took the largest hits, while renewable energy held up better than any other source, the IEA found. The pandemic weakened corporate balance sheets and increased uncertainty over future fuels demand, spurring the record cuts.