Theory and Model of Energy Investment and Financing

Energy investment and financing is a very complicated problem that is influenced by various factors. To consider energy industry investment strategies and financing modes in a scientific and reasonable way, to build a stable, economical, clean, and safe energy supply system, and to avoid the recurrence and wild fluctuations of imbalance between energy supply and demand, the issue of energy investment and financing should be deeply discussed. This article introduces the features, modes, influencing factors, basic principles, and future development of energy investment and financing. The key viewpoints include the following: energy investment has four features including higher capital intensity, longer debt maturity, complicated risks, and uncertainty of profit. Domestic savings, international capital, and financial markets are the main sources and channels of energy financing. The country's energy development strategy, energy policy, macroeconomic environment, level of development of the energy market and financial market, financing risks, resource status, and characteristics of the energy industry are the major influential factors in energy investment and financing. To determine the financing mode of the energy industry, five basic principles should be followed: accordance with the national strategy of energy development, risk dispersal, diversification of financing channels, rationality of the control of energy enterprises, and risk management and risk aversion. The demand for energy investment in developed countries is slowing down, and transitioning and developing countries will lead the demand for global energy investment in the future. New energy and energy efficiency will gradually replace fossil fuel energy and become the major direction for future energy investment.