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Middle East crisis is changing energy investment imperatives
Worldwide Energy investment Amid the conflict in the Middle East, countries and companies are rethinking their energy investment strategies in response to heightened concerns over energy security and the reliability of global trade flows, says the International Energy Agency in the newly published 2026 edition of its flagship publication ‘World Energy Investment’. The report highlights how the current energy crisis is changing risk perceptions and bolstering moves towards greater diversification. Coming just a few years after the energy crisis centred around Russia’s invasion of Ukraine in 2022, today’s supply situation is expected to leave a lasting imprint on future investment priorities – particularly in Asia and the Middle East, where the impact of the disruptions to shipping flows through the Strait of Hormuz have been felt most acutely. The report projects that global energy investment will reach $3.4 trillion in 2026, a slight increase year-on-year. Around $2.2 trillion is expected to go towards grids, storage, low-emissions fuels, nuclear, renewables, efficiency and electrification in 2026, while around $1.2 trillion is set to be invested in oil, natural gas and coal. Despite higher oil prices, oil investment is expected to decline for a third consecutive year in 2026. The report finds that uncertainty
over the duration of the price spike, long project lead times, supply chain constraints and tighter offshore rig markets are limiting near-term spending responses outside the Middle East. At the same time, natural gas investment is projected to rise to the highest level in a decade, supported by a wave of new LNG export projects, particularly in the United States and Qatar.
The report highlights growing interest among fuel-importing countries in energy sources available domestically including renewables, nuclear power and, in some cases, coal. Investment in renewable power projects is expected to total around $665 billion in 2026, with $365 billion going toward solar alone.
Investment prospects While annual investment growth in renewables has moderated following several years of rapid expansion, low-emissions sources still account for more than 70% of total power generation investment globally. Nuclear investment is continuing its resurgence, exceeding $80 billion annually, with close to 80 GW of new nuclear capacity under construction across 15 countries. Coal investment, meanwhile, is set to rise to $180 billion in 2026, the highest level since 2012, with China accounting for almost 70%
of global coal supply spending. The report notes that some Asian countries affected by the current crisis may seek to keep existing coal-fired power plants operating for longer to bolster energy security.
At the same time, the Middle East conflict is complicating the prospects for financing future energy projects. The conflict has triggered volatility within financial markets, slowing investment decisions in the short term and pushing up long-term financing costs. This could disproportionately affect capital-intensive energy technologies. Electricity-related investment remains the dominant theme in global energy spending trends. Investment in electricity supply and infrastructure is expected to reach nearly $1.6 trillion in 2026 and rise to $2 trillion when end-use electrification is included. Spending on electricity grids is projected to approach $550 billion, up nearly 20% year-on-year, while battery storage investment is set to exceed $100 billion. The electricity demands of the rapid expansion of data centres and artificial intelligence are also becoming a major influence on energy investment trends in some markets, particularly in the USA. Orders for new gas-fired power plants reached a 25-year high in 2025, with data centre needs playing a significant role.
Unit 2 RPV installed at Hinkley Point C UK Nuclear power
The reactor pressure vessel has been installed at unit 2 of the Hinkley Point C NPP under construction in Somerset in the UK, which will host two 1630 MWe EPR reactors. The RPV was installed using Big Carl, the world’s largest crane. EDF Energy said using Big Carl to lift the 500-tonne cylinder was an innovation for unit 2 “and another example of the project finding ways to improve performance between units 1 and 2”. The first reactor was lifted using a large temporary overhead lifting system. The new method saves space, time and money. The two EPR reactors are expected to operate for up to 80 years.
Big Carl lifting the reactor for Unit 2 (Credit: EDF).
Construction of unit 1 began in December 2018 followed by construction of unit 2 a year later. Unit 1 was originally scheduled to begin operation by the end of 2025, but this was pushed back to 2027 in May 2022. In January 2024, EDF announced that the “base case” was now for unit 1 to be operational in 2030, with the cost revised from £26bn ($32.8bn) to £31-34bn, at 2015 prices. After being lifted, the RPV was inserted
through a 19.5 metre high equipment hatch for its precision installation inside the reactor building. Once inside the 13 m long RPV was lifted and rotated into a vertical position by the large internal polar crane and lowered carefully on to a support ring with just 40 mm clearance on each side. The installation process took two days and was completed less than a year after the steel dome was lifted into place to close the second reactor building.
Unit 2 is being built 20-30% more quickly than unit 1, thanks to innovation and experience of building an identical design with the same teams. The unit 2 reactor building is
4 | May/June 2026 |
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further ahead than at the same stage for unit 1, with more equipment installed, as well as more structural steel work and the outer containment layer already in place. Three large heat exchangers have already been installed in unit 2, compared with none at the same point in unit 1. The RPV for unit 2 was manufactured at Framatome’s Saint-Marcel plant in Chalon-sur- Saône and delivered to the Hinkley Point C site in January. The unit 1 RPV was completed at Framatome’s Le Creusot facility in Burgundy and was delivered to the site in February 2023. It was installed in December 2024. The planned Sizewell C plant on the Suffolk coast in East Anglia will have two EPR reactors of similar design and is expected to be built faster and at less cost based on experience at Hinkley Point. Its baseline construction cost is estimated to be 22% less than the lowest current estimate for Hinkley Point C. A final investment decision for Sizewell C was taken in July 2025 with construction expected to be completed by 2039.
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