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IEA (2025), World Energy Investment 2025, IEA, Paris https://www.iea.org/reports/world-energy-investment-2025, Licence: CC BY 4.0
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How we track investment in energy
Tracking energy investment
The way investment is measured across the energy spectrum varies, largely because of differences in the availability of data and the nature of expenditures. This document highlights the methodology used to ensure that the estimates are consistent and comparable across sectors in the World Energy Investment 2025 (WEI 2025) report and other publications from the International Energy Agency.
The IEA measures investment as the ongoing capital spending on assets. For some sectors, such as power generation, this investment is spread out evenly from the year in which a new plant or upgrade of an existing one takes a final investment decision (FID), i.e. when a project reaches financial close or begins construction) to the year in which it becomes operational. For other sources, such as upstream oil and gas and liquefied natural gas (LNG) projects, investment reflects the capital spending incurred over time as production from a new source ramp up, or to maintain output from an existing asset.
For energy efficiency, the measurement task is more complex and much of the expenditure is by consumers for whom purchases of more efficient goods are not investments per se. In WEI 2025, as in other recent IEA reports, investment in energy efficiency aims to reflect the incremental spending by companies, governments, or individuals to acquire a piece of equipment that is more efficient than the local market average. Due to the different possible methodologies available, this estimate of energy efficiency investment is not definitive but still included to provide a comparison with the scale of investment in energy supply. Fossil fuel and power sector investments are those that raise or replace energy supply, while energy efficiency are counted as those that reduce energy demand.
Investment estimates are derived from International Energy Agency (IEA) data for energy demand, supply and trade, and estimates of unit capacity costs, analysis of which benefits from extensive interaction with industry. By default, investment data are given in year 2024 US dollars, adjusted using country-level gross domestic product (GDP) deflators and 2024 exchange rates. Unless otherwise stated, all time series and historical comparisons are presented in real 2024 US dollar terms, adjusted for inflation.
This investment approach mirrors real-world practices and aligns with capital expenditure in financial reporting. In reality, time lags and varied spending occur between FID and project operation. Where possible, financial and energy performance metrics are included to better reflect asset turnover and capital commitment decisions. Other areas of spending – including operating and maintenance expenditures, R&D, financing costs, mergers and acquisitions or public markets transactions – remain important for energy sector development, and are analysed on a standalone basis in IEA investment work, but are not included in the calculations of WEI 2025.