Global Investment in Energy to Hit $3.4tn in 2026, Renewables Attract $665 Billion

• Oil spending falls below $500bn for third straight year 

•Coal investment to reach $180bn

Emmanuel Addeh in Abuja

Global energy investment is projected to reach $3.4 trillion in 2026, with electricity infrastructure, renewable energy, storage and nuclear power accounting for the bulk of spending, a new report by the International Energy Agency (IEA) has said.

In its latest World Energy Investment 2026 report, the Paris-based agency stated that around $2.2 trillion of global energy spending this year would go into electricity grids, storage, low-emissions fuels, nuclear, renewables, energy efficiency and electrification.

By contrast, investments in fossil fuels, including oil, natural gas and coal are expected to total about $1.2 trillion. The report highlighted a major shift in global energy priorities, with electricity-related investments now dominating overall spending trends.

According to the IEA, investment in electricity supply and infrastructure is expected to reach nearly $1.6 trillion in 2026, rising to almost $2 trillion when end-use electrification is included.

Spending on electricity grids alone is projected to approach $550 billion this year, representing nearly 20 per cent growth year-on-year, while investment in battery storage is expected to exceed $100 billion.

The agency explained that growing concerns over energy security and disruptions to global supply chains are forcing countries to increasingly prioritise domestic energy sources and electricity systems.

Renewable energy remains one of the biggest beneficiaries of the global transition, with investment in renewable power projects projected at approximately $665 billion in 2026. Out of that figure, solar energy alone is expected to attract about $365 billion globally.

The IEA noted that despite slower growth after several years of rapid expansion, low-emissions technologies still account for more than 70 per cent of total global power generation investment.

Nuclear energy is also experiencing renewed momentum, with annual investment now exceeding $80 billion. The report also disclosed that close to 80 gigawatts of new nuclear capacity are currently under construction across 15 countries worldwide.

Despite elevated oil prices, investment in crude oil projects is expected to decline for the third consecutive year in 2026, falling below $500 billion.

The IEA attributed the drop to uncertainty surrounding the duration of current price increases, long project development timelines, supply-chain constraints and tighter offshore drilling markets. Natural gas, however, is expected to attract stronger capital inflows, with investment projected to rise to $330 billion, the highest level recorded in a decade.

Coal investment is also projected to rise sharply this year, reaching $180 billion, the highest level since 2012.

According to the report, China accounts for almost 70 per cent of global coal supply spending, while some Asian countries are expected to extend the lifespan of existing coal-fired plants to strengthen energy security.

The IEA further estimated that around $350 billion is currently being invested globally each year in energy efficiency improvements. It added that at least 20 countries have already announced fresh efficiency policies in response to ongoing disruptions in global energy markets.

The report warned, however, that geopolitical tensions and market volatility are increasing financing risks for future energy projects, particularly in emerging and developing economies where borrowing costs remain significantly higher than in advanced economies.

The IEA also identified the rapid expansion of artificial intelligence and data centres as an emerging force shaping energy investment trends.

Commenting on the outlook, IEA Executive Director, Fatih Birol, said the current energy security challenges were already reshaping global investment strategies.

“We are in the midst of the largest energy security crisis the world has ever faced – and I believe this will reshape investment strategies globally, with parallels to the major changes the energy world witnessed after the oil shocks of the 1970s,” he said.

“We are already seeing intensified efforts by both producer and consumer countries to diversify trade routes and energy sources – such as advancing new pipelines and other supply infrastructure…,” he added.