Global investment in the energy sector is expected to rise to $3.4 trillion in 2026, with renewable energy, electricity infrastructure, storage systems and nuclear power attracting the largest share of spending, according to a new report released by the International Energy Agency.
In its latest World Energy Investment 2026 report, the Paris-based agency said approximately $2.2 trillion would be invested this year in electricity grids, renewable energy, battery storage, low-emission fuels, nuclear energy, electrification and energy-efficiency projects.
By comparison, investments in fossil fuels such as oil, natural gas and coal are projected to total around $1.2 trillion.
The report highlighted a major global shift in energy priorities, noting that electricity-related investments are increasingly dominating worldwide spending trends.
According to the IEA, investment in electricity supply and infrastructure alone is expected to reach nearly $1.6 trillion in 2026, climbing to almost $2 trillion when end-use electrification projects are included.
Spending on electricity grids is projected to approach $550 billion this year, reflecting nearly 20 per cent year-on-year growth, while investment in battery storage is expected to surpass $100 billion.
The agency attributed the trend to growing concerns over energy security and supply-chain disruptions, which are pushing countries to prioritise domestic energy systems and more resilient electricity infrastructure.
Renewable energy continues to attract significant capital inflows, with global investment in renewable power projects expected to hit about $665 billion in 2026.
Solar energy alone is projected to receive approximately $365 billion in investment worldwide, making it one of the fastest-growing segments in the global energy market.
Despite slower growth after years of rapid expansion, the IEA said low-emission technologies still account for more than 70 per cent of total global power-generation investment.
The report also showed renewed momentum in nuclear energy, with annual investment now exceeding $80 billion. Close to 80 gigawatts of new nuclear power capacity are currently under construction across 15 countries.
Meanwhile, investment in crude oil projects is expected to decline for the third consecutive year, falling below $500 billion despite elevated global oil prices.
The IEA linked the decline to uncertainty over future oil prices, long development timelines for projects, supply-chain bottlenecks and tighter offshore drilling markets.
Natural gas investment, however, is projected to rise sharply to about $330 billion — the highest level recorded in a decade.
Coal investment is also expected to increase significantly this year, reaching $180 billion, its highest level since 2012.
According to the report, China accounts for nearly 70 per cent of global spending on coal supply projects, while several Asian countries are extending the lifespan of coal-fired power plants to strengthen energy security.
The IEA further estimated that global spending on energy-efficiency improvements currently stands at around $350 billion annually, with at least 20 countries introducing new efficiency policies in response to continuing disruptions in global energy markets.
The agency warned that geopolitical tensions and market volatility are increasing financing risks for future energy projects, particularly in developing economies where borrowing costs remain significantly higher than in advanced nations.
The report also identified the rapid expansion of artificial intelligence and data centres as an emerging factor influencing future energy demand and investment patterns.
Commenting on the outlook, IEA Executive Director Fatih Birol said the current global energy security challenges are reshaping investment strategies worldwide.
“We are in the midst of the largest energy security crisis the world has ever faced,” Birol said, adding that countries are increasingly diversifying energy sources, trade routes and supply infrastructure in response to global uncertainties.
