On Thursday, the International Energy Agency (IEA) said that the fall in Russian fossil fuel exports after its Ukrainian invasion will likely transform global energy dynamics for decades and will accelerate the green energy transition.
The Annual World Energy Outlook (WEO) launched by the IEA acknowledges the economic hit from halted supplies of Russian oil, natural gas and coal. Nevertheless, it maintains a best-case scenario in which no investments in new fossil fuel projects are required. (Reuters)
It further highlighted significant and long-lasting changes, driven by the global energy crisis, that could hasten the process of green energy transition to a more sustainable energy system.
The executive director of the International Energy Agency, Fatih Birol, said: “The energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable, and more secure energy system.”
The world is dealing with a crisis of unprecedented breadth & complexity
Oil & gas markets are facing major uncertainties amid today’s geopolitical upheaval
High energy prices have stoked inflation & created a looming risk of global recession
— Fatih Birol (@fbirol) October 27, 2022
Furthermore, the IEA projects that Russia’s supply of internationally traded energy will drop to 13 percent by 2030 from about 20 percent in 2021.
According to the executive director, this clean energy investment will cost Russia 1 trillion dollars in lost fossil fuel revenues by 2030 as compared to prior to the Ukraine invasion.
Global emissions of fossil fuels will peak by 2025, as coal use falls within the next several years, natural gas demand plateaus by 2030, and oil demand levels off in the middle of the next decade before dropping, it said. (Al Jazeera)
“Governments have so far committed well over $500bn, mainly in advanced economies, to shield consumers from immediate impact,” the IEA stated.
While some are trying to secure alternative fuel supplies and adequate gas storage, others have increased oil and coal-fired electricity generation, “extending the life times of some nuclear power plants and accelerating the flow of new renewable projects.” (Al Jazeera)
“With energy markets remaining extremely vulnerable, today’s energy shock is a reminder of the fragility and unsustainability of our current energy system,” it added.