Global energy investment is set to increase in 2025 to a record $3.3 trillion despite headwinds from elevated geopolitical tensions and economic uncertainty, a new IEA report says, with clean energy technologies attracting twice as much capital as fossil fuels.
Investment in clean technologies - renewables, nuclear, grids, storage, low-emissions fuels, efficiency and electrification - is on course to hit a record $2.2 trillion this year, reflecting not only efforts to reduce emissions but also the growing influence of industrial policy, energy security concerns and the cost competitiveness of electricity-based solutions, according to the 2025 edition of the IEA's annual World Energy Investment report. Investment in oil, natural gas and coal is set to reach $1.1 billion.
In addition to a comprehensive assessment of the current investment landscape across fuels, technologies and regions, this 10th edition of the World Energy Investment report explores some of the major changes over the past decade.
"Amid the geopolitical and economic uncertainties that are clouding the outlook for the energy world, we see energy security coming through as a key driver of the growth in global investment this year to a record $3.3 trillion as countries and companies seek to insulate themselves from a wide range of risks," said IEA Executive Director Fatih Birol. "The fast-evolving economic and trade picture means that some investors are adopting a wait-and-see approach to new energy project approvals, but in most areas we have yet to see significant implications for existing projects."
"When the IEA published the first ever edition of its World Energy Investment report nearly ten years ago, it showed energy investment in China in 2015 just edging ahead of that of the United States," Dr Birol added. "Today, China is by far the largest energy investor globally, spending twice as much on energy as the European Union - and almost as much as the EU and United States combined."
Over the past decade, China's share of global clean energy spending has risen from a quarter to almost a third, underpinned by strategic investments in a wide range of technologies, including solar, wind, hydropower, nuclear, batteries and EVs. At the same time, global spending on upstream oil and gas is gravitating towards the Middle East.
Today's investment trends clearly show a new Age of Electricity is drawing nearer. A decade ago, investments in fossil fuels were 30% higher than those in electricity generation, grids and storage. This year, electricity investments are set to be some 50% higher than the total amount being spent bringing oil, natural gas and coal to market.
Globally, spending on low-emissions power generation has almost doubled over the past five years, led by solar PV. Investment in solar, both utility-scale and rooftop, is expected to reach $450 billion in 2025, making it the single largest item in the global energy investment inventory. Battery storage investments are also climbing rapidly, surging above $65 billion this year.
Capital flows to nuclear power have grown by 50% over the past five years and are on course to reach around $75 billion in 2025. Rapid growth in electricity demand also underpins continued investment in coal supply, mainly in China and India. In 2024, China started construction on nearly 100 gigawatts of new coal-fired power plants, pushing global approvals of coal-fired plants to their highest level since 2015.
In a worrying sign for electricity security, investment in grids, now at $400 billion per year, is failing to keep pace with spending on generation and electrification. Maintaining electricity security would require investment in grids to rise towards parity with generation spending by the early 2030s. However, this is being held back by lengthy permitting procedures and tight supply chains for transformers and cables.
Lower oil prices and demand expectations are set to result in the first year-on-year fall in upstream oil investment since the Covid slump in 2020, according to the report. The expected 6% drop is driven mainly by a sharp decline in spending on US tight oil. By contrast, investment in new liquefied natural gas (LNG) facilities is on a strong upward trajectory as new projects in the United States, Qatar, Canada and elsewhere prepare to come online. Between 2026 and 2028, the global LNG market is set to experience its largest ever capacity growth.
Spending patterns remain very uneven globally - with many developing economies, especially in Africa, struggling to mobilise capital for energy infrastructure, the report finds. Today, Africa accounts for just 2% of global clean energy investment. Despite being home to 20% of the world's population and rapidly growing energy demand, total investment across the continent has fallen by a third over the past decade due to declining fossil fuel spending and insufficient growth in clean energy. To close the financing gap in African countries and other emerging and developing economies, international public finance needs to be scaled up and used strategically to bring in larger volumes of private capital, according to the report.
This year's edition of the World Energy Investment report features an interactive data explorer that enables users to compare energy investments across multiple sectors, fuels and technologies between the periods 2016-2020 and 2021-2025, covering global trends as well as data for 19 individual countries and regions.
