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Grid investments
…nuclear. Key analysis IEA analysis of nine major regions shows that increasing electricity generation and grid capacity by one terawatt-hour (TWh), will require investments of USD 30 to 110 million in emerging economies and USD 75 to 150 million in advanced economies. In order to save the same amount of electricity, energy efficiency measures would cost only between USD 10 million and 50 million. A closer look at grid management The deployment of energy efficiency measures typically requires less time than the implementation of most new generation and grid infrastructure. On average, new generation and grid infrastructure can take years to implement, whereas efficiency measures…
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Energy Efficiency Policy Toolkit Financing Energy Efficiency
…the benefits of the global energy transition.Investment patterns, however, remain uneven. China, the United States, and the European Union continue to attract the bulk of clean‑energy capital, while many emerging and developing economies face persistent barriers, including higher financing costs and limited access to affordable capital. As a result, efficiency investment in these economies is growing far more slowly than in advanced economies and China. The IEA stresses the need to mobilise more finance, reduce investment risks, and expand suitable financing instruments to support the deployment of energy‑efficient technologies and infrastructure. Households are the main investors in energy efficiency…
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The State of Energy Innovation 2026 Executive summary
…and the first patent was funded by the UK Government in 1981, before policy support fostered markets that drove further improvements. In the absence of private sector capital for next-generation geothermal development – a long-term project with high risks that is now starting to translate into major investments – governments funded nearly all the initial work from the 1970s to the 2010s.Cost-benefit evaluations typically show that the economic benefits of public energy R&D are far greater – even a hundredfold larger – than their costs. The most complete retrospective evaluations of this kind followed several multi-decade US programmes…
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Scaling Up Transition Finance
…to cut global emissions, especially in areas where clean technologies are not yet commercially available or cost-competitive. This is where transition finance comes in: it can help emissions-intensive countries, companies and sectors shift over time towards sustainable practices that are aligned with long-term climate and development goals.In this new report, the International Energy Agency (IEA) provides analyses to map the landscape for transition finance, explains why it matters, and highlights approaches that could move the debate forward.The report also examines the role of transition finance in the steel and cement, critical minerals, and the natural…
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Multiple Benefits of Energy Efficiency
As energy efficiency continues to gain attention as a key resource for economic and social development across all economies, understanding its real value is increasingly important. The multiple benefits approach seeks to expand the perspective of energy efficiency beyond the traditional measure of energy savings by identifying and measuring its impacts in full bloom.
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Investment in next-generation geothermal is surging. Policies are key to further growth
…These technologies are advancing quickly, potentially enabling economically-viable geothermal development nearly anywhere in the world. The IEA’s Future of Geothermal Energy report, published in late 2024, estimated that with continued technology improvements and reductions in project costs, next-generation geothermal could meet up to 15% of global electricity demand growth to 2050. Geothermal technology families Next-generation geothermal technology remains at an early stage of development. In general, geothermal projects remain among the most capital-intensive in the energy sector, with drilling and well costs often representing up to 80% of total costs. Yet the past year has…
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Cost of Capital Observatory Dashboard
…parts of the world that most need it. For additional information on how to estimate the cost of capital, this IEA article highlights the importance of financing costs in the energy transition, defines what financing costs are (also commonly referred to as weighted average cost of capital, or WACC) and provides both a theoretical and practical explanation of how to calculate them. For this dashboard we estimated financing costs as the weighted average of the after-tax (or all-in) cost of debt and the minimum expected equity internal rate of return (IRR).In 2025, the third year that we have run…
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Competitiveness
…shown to lead to improved product quality and consistency, contributing to brand reputation.Improved resource use, such as reduced equipment downtime and unplanned shutdowns, lower maintenance costs, and potentially reduced staff requirements for operation and monitoring. Efficiency has also been shown to increase worker health and safety, reducing the incidence of work-related accidents and health insurance costs.Reduced waste production, such as less use of materials and process water.Combined, these multiple benefits can more than double the benefits of energy cost savings. Need more information? IEA (2025), Gaining an Edge: The Role of Energy Efficiency in Enhancing Competitiveness.
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The State of Energy Innovation 2025 Executive summary
…insights into the health of the energy innovation system can be gleaned from data on R&D spending (a gauge of the effort directed to key challenges), patenting (a first-order indicator of R&D outputs), venture capital (VC) fundraising (a sign of the expected market value of new technologies), new product launches and competitiveness. Spending on energy innovation has widespread pay-offs Public and corporate energy R&D spending have risen in recent years, at around 6% per year in real terms. The latest available data indicate that direct government spending on energy R&D globally grew again in…
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Financing Clean Energy in Africa Clean energy investment landscape: setting the scene
…upfront spending. The cost of capital for utility-scale energy projects in Africa is two to three times higher than in advanced economies and is often higher for smaller projects that have fewer capital providers available. This can act as a major barrier to scaling up investment. Cost of capital largely reflects two sets of risks: those associated with the country, and those associated with the sector or technology. Addressing these requires different country-specific solutions, with country risks generally requiring longer-term structural reforms, and more specific risks addressed with energy policy reforms.At the country risk level, the…
