Steam is rising from the cooling towers of the Lippendorf power station south of Leipzig, Germany .alliance of images | image alliance | Images
Energy prices in the worldhave at all-time highs like the "power crisis hits the ' Europe and Asia - and the International Energy Agency warned Wednesday, volatility is here to stay.
In its annual report, the Paris-based agency said the world is currently underinvesting for future energy use, which will make the transition to net zero emissions unstable.
"There is an imminent risk of further turmoil in global energy markets " , said Fatih Birol, executive director of the IEA, in a statement. "We are not investing enough to meet ... future energy needs, and uncertainties set the stage for a volatile time to come. "
The report highlighted uncertainties in policy and demand, among other things.daring, as the reasons for the current underinvestment.
The dangers of a mismatched energy complex on the supply and demand side are now playing out as the global economic recovery from Covid-19 continues. Demand for energy has surged as businesses reopen and consumers resume pre-pandemic operations, but supply has remained tight as producers are reluctant to bring new production online.
Oil prices are up over 60% for 2021 after plunging to a record low in April 2020, while US natural gas prices have more than doubled this year. In Europe, spot prices for natural gas hit an all-time high this fall, while coal prices are also rising in preparation for the winter heating season.
Rising fuel costs fuel will be passed on to consumers and businesses, potentiallely hit the economic recovery.
"As the events of 2021 show, consumers are vulnerable when prices rise sharply," the report said. "Volatility and price shocks cannot be ruled out during the transition.
The World Energy Outlook report describes three possible scenarios ahead, in order to try to understand what the energy system will look like decades.
- Scenario of declared policies: based on policies that have already been implemented;
- Scenario of announced commitments: factors in objectives that have been set but not yet achieved. In this scenario, demand for fossil fuels peaks by 2025;
- Net zero emissions by 2050: factors of what needs to be done to limit global warming to 1.5 degrees Celsius above pre-industrial levels.
The report notes that for the first time in its projections, demand forOf oil declines in each scenario, but the pace varies widely. This in turn creates challenges for energy producers.
"If the supply moves away from oil or gas ahead of global consumers, then the world could face periods of market stress and volatility, "the report says. "Alternatively, if companies misinterpret the speed of change and overinvest, then these assets risk underperforming or becoming stranded.
In order t To achieve net zero emissions by 2050, clean energy spending is expected to reach $ 4 trillion per year by the end of this decade, according to the IEA. Although the figure seems large, the report notes that emissions can drop by 40% using cost-effective technologies, such as improving efficiency and limiting gas leaks.
However, the majority - or 70% - of the money will have to come fromprivate developers, consumers and Wall Street.
The report adds that the scale of the investments required creates "huge economic opportunities " for clean energy technologies, including wind turbines, solar panels, lithium-ion batteries , electrolysers and fuel cells. In total, the IEA has stated that the market for these green technologies will reach $ 1 trillion per year by 2050, which is equivalent to the current size of the oil market.
"Clear signals and guidance from policy makers are essential. If the road ahead is paved with only good intentions, then it will be a really bumpy ride " report.