According to the IEA’s benchmark yearly report, entitled World Energy Outlook, the current annual investment in energy supply of $1.6tn (£955bn, €1.2bn) should be raised steadily towards $2tn over the coming decades.
Furthermore, the report said that the yearly spending on energy efficiency has to rise by 2035 to $550bn from the current average of $130bn.
IEA executive director Maria van der Hoeven said that the future energy system’s reliability and sustainability depends on investment.
"There is a real risk of shortfalls, with knock-on effects on regional or global energy security, as well as the risk that investments are misdirected because environmental impacts are not properly reflected in prices," Hoeven added.
In the report’s main scenario, around $40tn, of the cumulative global investment bill to 2035 of $48tn, needs to be pumped in energy supply and the remaining in energy efficiency.
The report also suggest that of $40tn, around $23tn needs to invested into fossil fuel extraction, transport and oil refining; almost $10tn into power generation, of which low-carbon technologies including renewables ($6tn) and nuclear ($1tn).
Additionally, $7tn requires to be invested into transmission and distribution.
IEA chief economist Fatih Birol said that Policy makers come across complex choices as they try to achieve progress towards energy security, competitiveness and environmental goals.
"These goals won’t be achieved without mobilising private investors and capital, but if governments change the rules of the game in unpredictable ways, it becomes very difficult for investors to play."
