Replying to questions by ETEnergyWorld at the launch of IEA’s latest report, Birol said government policies will be critical for investments to come back on track
New Delhi: It will not take too long for the world to come out of the historic 20 per cent fall in global clean energy investments, according to Fatih Birol, executive director, International Energy Agency (IEA).
Replying to questions by ETEnergyWorld at the launch of IEA’s report on Wednesday, Birol said that government policies will be critical for investments to come back on track.
“I hope this will not take too long because we are risking locking in our energy system, which is a big risk coming through,” he said.
On bringing back investments in these times he said government policies will play a critical role.
“If we leave everything to the markets… If there are no government policies put in place in order to have the clean energy investments rebound strongly, we will not be able to see investments coming in a strong way,” Birol said.
He added that when it comes to renewables, declining cost of renewable energies and becoming more competitive alone will not shelter them from the effects of the COVID-19 crisis, therefore, government policies would be critical in terms of renewables alongwith auctions and long-term contracts.
On being asked about which sectors would attract most investments post-COVID, Birol said, “…We are not talking about the clean electricity transitions, we are talking about the clean energy transitions. Hence, investment in hydrogen, carbon capture, and storage will be critically important.”
He said that they hope recovery packages will include right energy policies to help governments create jobs, boost the economy, and prepare for a much cleaner, resilient, and modern energy sector after the crisis.
According to IEA’s report titled ‘World Energy Investment 2020’ released today, global energy investments are set to nosedive by about $400 billion or 20 per cent, as compared to last year due to the COVID-19 crisis, resulting in serious implications for energy security and clean energy transitions.
It added that this would be the largest drop in global energy investment in history, with spending expected to plunge in every major sector from fossil fuels to renewables, and efficiency.