Renewable-energy projects are struggling the most in terms of investment in the energy sector, according to a report published by the International Energy Agency (IEA) on 27 May.

The agency predicts that a sharp fall in energy demand could see global electricity consumption drop by up to 3.5% this year — the first contraction since 1945. Combined with tighter access to credit, the weak demand means that many firms in the oil, gas and coal sectors are having to cut back on their spending. The slump is even more pronounced for renewables projects, which are often developed by smaller companies.

Government stimulus spending will trigger additional public and private investment in renewable energy (see chart), but the agency thinks that the stimulus funding needs to be increased sixfold if patterns of energy use are to be altered sufficiently to keep the global temperature rise within 2 °C of pre-industrial levels.