oil-pump
The oil pump in an internal combustion engine circulates engine oil under pressure to the rotating bearings, the sliding pistons and the camshaft of the engine.

The International Energy Agency’s (IEA) new report examines the impact coronavirus will have on energy spending in the coming year, as well as last year’s trends.

The lockdown measures are hitting fossil fuels the hardest – with funding for oil, the worst hit, falling 30% – while renewables investment will see a relatively small drop of 10%.

“The historic plunge in global energy investment is deeply troubling for many reasons,” Fatih Birol, executive director at the IEA, said in a statement.

“It means lost jobs and economic opportunities today, as well as lost energy supply that we might well need tomorrow once the economy recovers,” he continued. “The slowdown in spending on key clean energy technologies also risks undermining the much-needed transition to more resilient and sustainable energy systems.”

The overall share of energy spending for clean energy, including renewables, nuclear, and efficiency improvements, has been stuck at around one-third for a few years but will approach 40% in 2020 because fossil fuels are taking such a battering.

The falling energy demand, lower prices, and the rise of non-payment of bills will mean energy revenues going to governments and energy companies drop by more than $1tn this year.

At the start of the year, IEA forecasted energy investment would rise by 2% in 2020, the biggest annual rise in six years, but it is now expected to plummet by 20%.

IEA says oil accounts for most of the decline in revenue, with global consumer spending on oil set to fall below the amount spent on electricity for the first time ever.

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