Investment in the supply of energy and natural resources is set to reach record levels in 2025, with spending exceeding US$1.5 trillion, up 6 per cent in real terms in 2024.
The headline figure is for capital investment across power and renewables (excluding wires), upstream oil and gas and metals and mining, according to Wood Mackenzie.
While overall spend is increasing, the growth rate is half that of the early part of the decade.
Capital discipline is a factor in all sectors, in part reflecting caution on the pace of the energy transition. Low carbon’s share of investment climbed sharply from 32 per cent in 2015 to 50 per cent in 2021 since when it stalled.
The trend is not expected to resume an upward trajectory again until late this decade and to meet the goals of the Paris Agreement Wood Mackenzie estimates that low-carbon spend will have to increase by 60 per cent by 2030.
Power and renewables continue to attract the largest share of investment at just under US$800 billion, up 9 per cent and with 90 per cent of that in renewables.
Expenditure on emerging low-carbon technologies is forecast to rise by 50 per cent this year to US$60 billion.
More projects are coming through mainly in carbon capture and storage, with rising costs a threat, particularly in hydrogen. Upstream oil and gas spend is expected to rise 3 per cent to US$550 billion, the highest since 2018 as financing constraints ease.
The report forecasts metals and mining investment will slip by 13 per cent to US$140 billion, with weak prices leading to the deferral of nickel and lithium projects a key factor.
Meanwhile, oil and gas companies have been actively positioning for a slower-paced transition since 2023.
Most US Majors ExxonMobil, Chevron and ConocoPhillips have used highly rated equity to acquire US-listed independents, increasing their exposure to stronger-for-longer oil and gas demand and a ruling on Chevron’s proposed acquisition of Hess is due in 2025.