India’s energy spending has surged to a record $170bn, driven by a massive expansion in solar infrastructure and refining capacity, according to the report titled ‘World Energy Investment 2026’ published by International Energy Agency.
The IEA report states the West Asia conflict is altering global energy strategies. Security concerns from the closure of the Strait of Hormuz have triggered the second energy crisis in five years. Nations are responding by diversifying trade routes and prioritising domestic sources to ensure reliability.
Executive Director Fatih Birol believes this will reshape investment strategies globally, comparing it to the oil shocks of the 1970s. Global energy investment is projected to reach $3.4trn in 2026. $2.2trn is toward clean energy, renewables, nuclear power, and electricity grids. $1.2trn is set to be invested in oil, natural gas, and coal. Despite elevated prices, oil investment is forecast to decline for a third year to below $500bn. This is due to price volatility, long project lead times, supply chain constraints and tighter offshore rig markets.
1 May 2026
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Global Energy Spending Trends
Natural gas investment will rise to $330bn, supported by LNG projects in the United States. Domestic energy projects are seeing renewed interest from importing countries. Renewables investment is expected to total $665bn, with $365bn focused on solar.
Nuclear investment exceeds $80bn annually with around 80 gigawatts of new nuclear capacity currently under construction across 15 countries. Coal investment is set to reach $180bn, its highest level since 2012, with China accounting for 70% of global supply spending. Electricity remains the dominant investment theme. Spending on electricity supply and infrastructure is projected at $1.6trn, rising to $2trn with electrification.
Spending on electricity grids is projected to approach $550bn, up nearly 20% year-on-year, while battery storage investment will exceed $100bn. Rapid expansion in data centres and artificial intelligence is further driving demand, particularly in the US. The conflict has caused financial volatility, raising costs for projects in developing economies.
Rising Energy Risks
A report published by the International Monetary Fund on March 30 warned that geopolitical conflicts and supply disruptions are increasing risks to global energy markets, forcing countries to strengthen domestic energy systems and diversify imports.
The IMF noted that volatility in oil and gas trade routes could accelerate investments in renewables, electricity grids and strategic energy infrastructure worldwide.
