Global investment in the energy sector will reach $3.4 trillion in 2026 – IEA

Global investment in the energy sector is expected to reach $3.4 trillion this year, representing a slight year-on-year increase. This is according to the latest annual thematic report from the International Energy Agency (IEA).

It is expected that approximately $2.2 trillion will be directed toward grids, energy storage, low-emission fuels, nuclear energy, renewable energy sources, efficiency, and electrification. About $1.2 trillion is planned to be invested in oil, natural gas, and coal.

As noted by the IEA, the current energy crisis, resulting from the de facto closure of the Strait of Hormuz, is changing risk perceptions and driving a shift toward greater diversification. The current supply shock, which occurred just a few years after the energy crisis triggered by Russia’s invasion of Ukraine in 2022, will leave a lasting mark on future investment priorities, particularly in Asia and the Middle East.

“We are experiencing the greatest energy security crisis the world has ever faced, and I believe this will change investment strategies worldwide, much like the significant changes the energy sector underwent following the oil shocks of the 1970s,” noted IEA Executive Director Fatih Birol.

According to him, there is already a noticeable intensification of efforts by both producer and consumer countries to diversify trade routes and energy sources, such as the promotion of new pipelines and other infrastructure, as well as a greater shift toward domestically available resources. These measures range from renewable energy and nuclear power to coal, oil, and gas, as well as broader efforts to strengthen electrical systems, expand electrification, and accelerate energy efficiency.

In particular, the agency forecasts that investment in renewable energy projects will total approximately $665 billion in 2026, of which $365 billion will be directed solely toward solar energy.

Although annual growth in renewable energy investments has slowed after several years of rapid expansion, they still account for over 70% of total global investment in electricity generation. Additionally, investments in nuclear energy continue to rebound.

As a reminder, the World Bank forecasts a 24% increase in global energy prices by 2026. This year, overall commodity prices are expected to rise by 16%, reaching their highest level since 2022 amid the war with Iran.