The war in Ukraine will likely speed up the global transition away from fossil fuels toward cleaner energy technologies, according to the IEA.
While Russia’s invasion of Ukraine has created natural gas shortages in Europe and sparked a global energy crisis, the International Energy Agency’s (IEA) World Energy Outlook 2022 (WEO) provides indispensable analysis and insights on the implications of this profound and ongoing shock to energy systems across the globe.
For the first time, the agency now predicts that worldwide demand for every type of fossil fuel will peak in the near future. And the biggest reason for this prediction is that many countries around the world are embracing greener technologies.
Instead of relying on fossil fuels, some nations are turning to wind turbines, solar panels, nuclear power plants, hydrogen fuels, electric vehicles, and electric heat pumps, according to the New York Times.
In the United States, Congress approved more than $370 billion in spending for such technologies under the recent Inflation Reduction Act. Japan is pursuing a new “green transformation” program that will help fund nuclear power, hydrogen, and other low-emissions technologies.
“Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” said IEA executive director Fatih Birol, according to Reuters.
“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”, Birol added.
The IEA suggests that any short-term gaps created by the reduction in fossil fuel supplies from Russia will need to be plugged from elsewhere, relying on projects with “short lead times” which rapidly bring oil and gas supplies to market without locking in dependency.
“No one should imagine that Russia’s invasion can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero [greenhouse gas] emissions by 2050,” IEA wrote, reports Energy Wire.
Global clean energy investment is set to rise to more than $2 trillion a year by 2030, up by half from current levels, while “international energy markets undergo a profound reorientation in the 2020s as countries adjust to the rupture of Russia-Europe (energy) flows, the IEA said.
Yet that remains far short of what is needed for the world to comply with the 2050 net-zero emissions goal, as outlined in the Paris climate accord. At least twice as much clean energy investment, over $4 trillion per year, would be necessary by 2030 in order to comply, according to IEA’s modeling.
The IEA is calling for a “renewed international effort” to help finance clean projects in less wealthy countries. “It is essential to bring everyone on board, especially at a time when geopolitical fractures on energy and climate are all the more visible,” said Birol.
