There has been an interesting report from the International Energy Agency (IEA) that suggests that Russia's invasion of Ukraine will have long-lasting effects on energy supply and markets, a new report suggests. The IEA states the world faces its first "truly global energy crisis" as a result.
The report also noted that unaffordable energy bills remain a huge problem, driven up as the exports of oil and gas have been restricted. The IEA suggests that energy crisis should also be seen as a turning point, speeding up the world's transition to green energy.
"With unrelenting geopolitical and economic concerns, energy markets remain extremely vulnerable, and the crisis is a reminder of the fragility and unsustainability of the current global energy system. The heaviest burden is falling on poorer households where a larger share of income is spent on energy", the report warned.
The Paris-based agency calculated the value of government spending to protect customers from price rises currently stands at $550 billion (£473 billion) worldwide, and is set to rise further, particularly in the UK and Germany. The IEA said the most effective policies to protect customers from the impact of soaring costs, and changing energy infrastructure, had been introduced by the likes of the US, Japan and Korea.
The IEA also cited the REPowerEU scheme, which aims to make European Union (EU) countries independent of Russian energy by 2030. The IEA predicts that Russia's share of global energy trade will fall from 20% currently to 13% by 2030. The report also said that for the first time ever, its forecasts - based on current prices and government policies - showed that global demand for every fossil fuel will either be peaking or reaching a plateau.
"[We predict] coal use falls back within the next few years, natural gas demand reaches a plateau by the end of the decade, and rising sales of electric vehicles (EVs) mean that oil demand levels off in the mid-2030s before ebbing slightly to mid-century", it concluded.
Although the UK and Europe's sanctions on Russian oil imports did little to dent demand from India and China this year, it found that the conflict in Ukraine had sped up investment in greener energy sources. The UK, for example, accelerated its spending on Direct Air Capture (DAC) technologies - a method of removing harmful carbon dioxide from the atmosphere.
Countries which have agreed to reach net zero, where they are not adding to the amount of greenhouse gases in the atmosphere, by 2050 include the UK, Japan, Korea, Canada and the EU. The report also cautioned, however, that in order to reach net zero emissions by 2050, clean energy investment would need to be above $4 trillion by 2030. At current levels, it is predicted to reach only half of that figure.
While the IEA isn't pulling its punches here: this is a global crisis, of unprecedented breadth and complexity, and despite the impact of Covid, it's essentially Russia's fault.
The report points out that while the pain is spread around the world - stoking the rising cost of living and creating inflationary pressures - it's the poor who will suffer the most because they spend more of their income on energy (and food, which is also made more expensive by high energy costs). Many will lose access to electricity altogether.
The IEA also believes the crisis is an opportunity, but, It does not accept at all to the idea that investment in "clean" energy such as renewables might be partially responsible for high prices. This IEA report sounds a call to arms: more investment is needed in clean tech, not less - and stronger policies will be required to secure the necessary investment.
The IEA claims will make energy more secure and more affordable and also suggests that fossil fuel use, which has climbed alongside economic growth since the industrial revolution, may soon peak - before settling into a decline.
The problem is that the IEA's projection of demand for oil and gas is effectively a death sentence for the planet, with oil use to rise and then plateau in the mid 2030s, gas to rise before levelling off by the end of the decade. The IPCC are telling us that fossil fuels need to reduce by 45% to have any chance of remaining within 1.5°c of warming.
The Conservative Party (and recent Conservative government’s when not dismembering themselves over BREXIT) have always struggled with the concept of green sustainable energy ( in its various forms ) and choosing to put common sense before profit, let along struggling with the possibility of community beneficial energy production and ownership.
Even with their periodic attempts at green washing, started by David Cameron petting a husky in the artic pre 2010, the whole idea has not sat well with the libertarian free marketeers. It’s is important to remember that it was the Lib Dem - Conservative coalition government who extended the UK’s reckless commitment to Nuclear energy ( with some very iffy commercial partners ) while making life much more difficult for the growth of sustainable green energy.
Now we all know that Big energy has deep pockets and close links with fat divided profits at the City of London - which in turn has close links to some of the inhabitants of the Palace of Westminster. Boundaries are conveniently blurred - EDF ( a French State owned energy company ) won the contact to build a lucrative Nuclear energy plant - post the 2015 Westminster general election ( judgment day for the Lib Dems ) a former Lib Dem energy minister found a well salaried job with EDF…
The current Conservative Westminster government given half a chance will probably quite happily drop all the successive Westminster governmental commitments to renewables as quickly as a snowball would melt in hell. The previous but one PM was effectively stitched up by the fact the COP 26 was in Glasgow and difficult to ignore.
The dropping of the COP26 post from the Cabinet, and the new PM’s decision not to go and the effective blocking of the King from going to the COP26 Conference in Egypt certainly sends a clear message that saving the planet ( and us ) and growing green energy is just not that important. Although the current PM is struggling to give himself some wiggle room to avoid a new PR disaster… which could result from non attendance… so much for business as usual…
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