IEA: Global Shocks Boost Energy Policy & Spending

The International Energy Agency (IEA) reports a surge in global energy policymaking and government spending, driven by recent global shocks, according to its ‘State of Energy Policy 2026’ report. Governments are increasingly prioritizing energy security, resilience, and affordability amid geopolitical tensions and supply chain vulnerabilities.

In 2025, annual global government spending on energy exceeded $405 billion, primarily allocated to long-term investments in renewable energy, energy efficiency, and energy infrastructure. This expenditure aims to diversify energy sources and bolster domestic capabilities in the face of potential disruptions.

The IEA’s report, which analyzes over 6,500 policy measures across 84 countries, highlights a growing focus on managing risks in critical mineral and energy technology supply chains. Approximately one-third of all critical mineral policies tracked by the IEA were introduced in the last five years, spurred by increasing export controls on minerals vital to the energy sector. These policies often involve strategic investments in domestic mining, processing, and refining capacity, reflecting a move towards greater self-reliance.

While some countries strengthened energy efficiency standards in 2025, regulatory rollbacks and delays, particularly concerning road transport, could expose households and businesses to energy price volatility. This highlights the tension between short-term relief and long-term energy security goals.

The IEA suggests that the current energy crisis, exacerbated by conflicts, may trigger a new phase of dynamic energy policymaking, reminiscent of the 1970s oil crises. This could lead to increased government intervention, strategic investments in key technologies, and a reshaping of the global energy landscape, creating potential opportunities for private equity and venture capital investors focused on energy transition and security.