About 60 per cent of a cumulative $44 trillion in investment needed in global energy supply is expected to come from the oil, gas and coal industry in 2040, according to International Energy Administration (IEA).
IEA said in its latest World Energy Outlook 2016 that an extra $23 trillion is required for improvements in energy efficiency.
The main stimulus for upstream oil and gas investment is the decline in production from existing fields.
“In the case of oil, these are equivalent to losing the current output of Iraq from the global balance every two years, and in the power sector the relationship between electricity supply and generating capacity is changing,” IEA said.
The Nigerian oil and gas sector requires about $7 billion capital investment yearly, to fund exploration and development to achieve the nation’s crude production targets.
It also requires additional $7.5 billion to improve on its ageing transmission infrastructure across the country.
According to the report, a large share of future investment is in renewables-based capacity that tends to run at relatively low utilisation rates, “so every additional unit of electricity generated is set to necessitate the provision of 40 per cent more capacity than during the period 1990 to 2010.
“The increased share of spending on capital-intensive technologies is balanced in most cases by minimal operational expenditures, e.g. zero fuel costs for wind and solar power,” it added.
IEA expects a 30 per cent rise in global energy demand to 2040, which means an increase in consumption for all modern fuels, but the global aggregates mask a multitude of diverse trends and significant switching between fuels.
It noted that hundreds of millions of people are still left in 2040 without basic energy services.
IEA said that natural gas fares best among the fossil fuels, with consumption rising by 50 per cent.