According to latest estimates by the IEA, global energy investments are likely to fall by around 20% this year, a reduction of nearly $400 billion, as a result of the ongoing coronavirus pandemic. The agency has cautioned that this could have a severe impact on energy security and the drive towards clean energy as the priority would be on economic recovery.

Before the pandemic struck the world, the IEA had estimated that global energy investment could rise by 2% this year, from $1.8 trillion in 2019. This would have been the largest increase in investment seen in six years.

Executive Director at IEA, Fatih Birol, observes, “The historic plunge in global energy investment is deeply troubling for many reasons. It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers.”

As a result of falling demand for energy and weaker prices in the wake of the coronavirus crisis, revenues earned by governments and the energy industry are expected to decline by more than $1 trillion this year. With energy companies around the world cutting their capital spending plans and shelving projects, it could result in higher debts even after the crisis abates, which could further pressure future investment plans.