- Global energy investment is projected to reach US$3.4 trillion in 2026, with electricity infrastructure and clean energy attracting the largest share of spending.
- Countries are accelerating efforts to diversify energy sources and trade routes following a second major energy crisis in five years.
- Investment in grids, storage, renewables and nuclear continues to outpace spending on fossil fuels, although coal and gas investment is also rising in response to energy security concerns.
The escalating conflict in the Middle East and the effective closure of the Strait of Hormuz are reshaping global energy investment priorities, prompting governments and businesses to place greater emphasis on energy security, diversification and domestic energy resources.
According to the International Energy Agency’s 2026 World Energy Investment report, the latest supply shock marks the second major global energy crisis in five years and is expected to leave a lasting impact on energy investment decisions, particularly across Asia and the Middle East where disruptions to shipping routes have been most severe.
IEA Executive Director Fatih Birol said the world is experiencing the largest energy security crisis in history, drawing comparisons with the oil shocks of the 1970s that fundamentally transformed global energy markets.
He noted that both energy producers and consumers are intensifying efforts to diversify supply routes and energy sources through new pipelines, supply infrastructure and increased reliance on domestically available resources. These include renewable energy, nuclear power, oil, gas and coal, alongside greater investment in electrification, energy efficiency and grid resilience.
Global energy investment is forecast to increase slightly to US$3.4 trillion in 2026. Of this total, approximately US$2.2 trillion will be directed toward electricity grids, energy storage, low emissions fuels, nuclear power, renewable energy, energy efficiency and electrification. Investment in oil, natural gas and coal is expected to total around US$1.2 trillion.
Despite elevated oil prices, investment in oil supply is forecast to fall below US$500 billion for the third consecutive year. The report attributes this decline to uncertainty over the duration of the current price spike, lengthy project development timelines, supply chain constraints and tighter offshore drilling markets outside the Middle East.
In contrast, natural gas investment is projected to rise to US$330 billion, the highest level in a decade, driven by a new wave of liquefied natural gas export projects, particularly in the United States and Qatar.
Renewable energy remains a key beneficiary of the global shift toward energy diversification. Investment in renewable power projects is expected to reach approximately US$665 billion in 2026, including US$365 billion allocated to solar energy. Although growth rates have moderated after several years of rapid expansion, low emissions technologies still account for more than 70% of total global power generation investment.
Nuclear energy is also experiencing renewed momentum, with annual investment exceeding US$80 billion. Nearly 80 GW of new nuclear generation capacity is currently under construction across 15 countries.
At the same time, energy security concerns are supporting a resurgence in coal investment. Global coal spending is forecast to reach US$180 billion in 2026, the highest level since 2012, with China accounting for almost 70% of global coal supply investment. Several Asian economies affected by the current crisis are expected to extend the operating life of existing coal fired power stations to strengthen energy security.
Energy efficiency continues to attract significant investment, with approximately US$350 billion spent globally each year on efficiency improvements. The IEA reports that around 20 countries have already introduced new energy efficiency policies in response to the latest crisis, although substantial policy and investment gaps remain.
The report also warns that ongoing geopolitical instability is increasing financing risks for future energy projects. Market volatility is delaying investment decisions and raising long term financing costs, creating additional challenges for capital intensive technologies. Emerging and developing economies are expected to be particularly affected as borrowing costs remain significantly higher than those in advanced markets.
Electricity infrastructure remains the dominant investment theme across the global energy sector. Spending on electricity supply and infrastructure is projected to reach nearly US$1.6 trillion in 2026 and approximately US$2 trillion when end use electrification investments are included.
Investment in electricity grids is forecast to approach US$550 billion, representing growth of almost 20% compared with the previous year. Battery storage investment is also expected to exceed US$100 billion as countries seek to improve grid flexibility and reliability.
Growing electricity demand from data centres and artificial intelligence is emerging as a major driver of investment, particularly in the United States. Orders for new gas fired power plants reached a 25 year high in 2025, supported in part by rising demand from data centre developments.
Strong demand for power generation equipment in both the United States and the Middle East is also tightening global turbine supply, limiting the availability of equipment for deployment in other regions and potentially affecting project timelines worldwide.
Author: Bryan Groenendaal
