Mubasher: Investment in the global energy industry dropped for the third consecutive year, triggering worries over the world’s capacity to supply sufficient power, the International Energy Agency (IEA) reported on Tuesday.

Governments and businesses all over the globe invested a total of $1.8 trillion into energy infrastructure, equipment, and resources, reflecting a 2% drop in global investment adjusted for inflation from 2016, the IEA said in its World Energy Investment 2018 report.

It highlighted that this downward trend did not seem to be reversing.

Governments are undertaking a larger role in energy sector investment, given that state-backed enterprises accounted for over 40% of overall global energy investments. Their policies are also driving private investment.

"Despite this increased role of governments, the overall trend of energy investment remains insufficient for meeting energy security, climate and air quality goals, and is not spurring an acceleration in technologies needed for the clean energy transition," IEA executive director Fatih Birol stated.

Investment in renewable power dropped 7% as the growth seen in solar and wind energy was offset by declines in hydropower and nuclear power.

The electricity industry was the top investment recipient in 2017 for the second straight year, attracting over $750 billion. However, overall expenditure fell 5% year-on-year on the back of a steep decline in spending on power stations offsetting robust spending on grids.

Moreover, a record high of $300 billion was spent over networks that transfer electricity from power plants to homes and businesses, rising 1% from a year earlier.

Meanwhile, investments in power generating stations, especially those run by coal, hydropower and nuclear fuel, saw the largest drop in 2017, falling by 10%, mainly due to the declining spending on coal-fuelled plants in China and India.

Spending on natural gas-fuelled stations jumped 40%, mainly owing to capital flows in the US and the Middle East and North Africa (MENA).