The IEA recently published the World Energy Outlook (WEO) 2014 Special Report “World Energy Investment Outlook”. Questions about the reliability, affordability and sustainability of our energy future often boil down to questions about investment. But the report questions whether investors are ready to commit capital in a fast-changing energy world? This special report takes up this question in a full and comprehensive update of the energy investment picture to 2035, the first full update since the 2003 World Energy Investment Outlook.

It is useful to review the report’s findings about investment in energy efficiency. The executive summary states:

Of the $8 trillion investment in energy efficiency to 2035, 90% is spent in the transport and buildings sectors, reflecting policy ambitions and remaining efficiency potentials. The European Union, North America and China together account for two-thirds of the total, reflecting the size of their car markets and vehicle efficiency standards in place or planned; efforts in the European Union and North America to improve the efficiency of electrical appliances and the buildings stock; and China’s priority to upgrade the efficiency of its industry.

The highlights from the chapter on investment in energy efficiency are:

• Current investment in improving energy efficiency above the average level in 2012 is estimated to be around $130 billion/year, which is equivalent to one-fifth of power sector investment or 13% of fossil fuel investment.

• In New Policies Scenario, households need to make about half of total investment, businesses about 40% and governments 11%

• More than 70% of total investment is in the transport sector, as a result of increased efficiency standards for new vehicles, and the sheer volume of vehicles – three billion – affected over the period to 2035.

• Energy sector decarbonisation requires an increase of more than eight times from the current level of annual efficiency investment, reaching $1.1 trillion in 2035.

The report is available on the IEA website.