IEA report to the G8 - May 26
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The impact of the financial and economic crisis on global energy investment
International Energy Agency
From the Executive Summary
Energy investment worldwide is plunging in the face of a tougher financing environment, weakening final demand for energy and falling cash flows - the result, primarily, of the global financial crisis and the worst recession since the Second World War. Reliable data on recent trends in capital spending and demand are still coming, but there is clear evidence that energy investment in most regions and sectors will drop sharply in 2009. Preliminary data points to sharp falls in demand for energy, especially in the OECD, contributing to the recent sharp decline in the international prices of oil, natural gas and coal...
Implication for energy security, climate change and energy poverty
Falling energy investment will have far-reaching and, depending on how governments respond, potentially gave effects on energy security, climate change and energy poverty. Cutbacks in investment in energy infrastructure will only affect capacity with a lag, often amounting to several years. So, in the near term at least, weaker demand is likely to result in an increase in spare or reserve production capacity. But there is a real danger that sustained lower investment in supply in the coming months and years, could lead to a shortage of capacity and another spike in energy prices in several years time, when the economy is on the road to recovery. The faster the recovery, the more likely that such a scenario will happen.
(24 May 2009)
IEA’s dire warning on green stimulus and renewables
Kate Mackenzie, Financial Times
The IEA’s report for G8 energy ministers, to be presented this Sunday in Rome, has generated a few stories. Some picked up on the oil supply squeeze that awaits the world due to massive cuts in production investment. I wrote yesterday that the IEA forecasts that, for the first time since World War II, world electricity consumption will decline in 2009.
IEA chief economist Fatih Birol said he personally thought the electricity forecast was the most striking finding of the report.
However he was also keen to highlight concern about green spending in the G20 stimulus packages:
The agency will also tell ministers that its calculation of the stimulus spending required from G20 nations on renewable energy was inadequate and should rise by a factor of six if greenhouse gas emissions targets set by the United Nations were to be met...
(22 May 2008)
Global electricity use forecast to fall
Kate Mackenzie in London, Financial Times
Global electricity consumption will fall this year for the first time since 1945, according to the International Energy Agency.
The watchdog for developed energy consuming countries will tell energy ministers from the Group of Eight leading economies on Sunday that electricity demand will fall 3.5 per cent in 2009.
In China, where power use is seen as a more reliable barometer of economic activity than official economic measures, consumption will be more than 2 per cent lower than 2008. Russia will see a fall of almost 10 per cent, while countries in the Organisation for Economic Co-operation and Development will see a fall of almost 5 per cent...
(22 May 2009)