Daily Management Review

IEA: Energy Crisis Brought On By Ukraine War Will Hasten The Transition To A Greener Economy


IEA: Energy Crisis Brought On By Ukraine War Will Hasten The Transition To A Greener Economy
The International Energy Agency (IEA) stated on Thursday that the decline in Russian fossil fuel exports following its invasion of Ukraine this year will change the global energy landscape for decades and can help to speed up a switch to green energy.
The annual World Energy Outlook from the International Energy Agency (IEA) acknowledges the economic impact of decreased Russian oil, natural gas, and coal supplies, but it maintains an environmental best case scenario in which no additional investments in fossil fuel projects are required.
According to the IEA report, the global energy crisis is bringing about significant and long-lasting changes that could hasten the switch to a more secure and sustainable energy system.
"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.
"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.
Short-term gaps caused by the decrease in Russian fossil fuel supplies will need to be filled from other sources.
The best candidates are "short lead time" initiatives that swiftly deliver oil and gas supplies to market without creating dependency.
By 2030, investments in clean energy are expected to increase to more than $2 trillion annually, up from current levels by half, while, according to the IEA, "international energy markets undergo a profound reorientation in the 2020s as countries adjust to the rupture of Russia-Europe (energy) flows."
The IEA shocked the energy sector last year when it claimed that in its most climate-friendly Net Zero Emissions scenario, new oil and gas fields beyond 2021 are not necessary due to lower demand and an increase in low emissions fuels.
Russia, the largest exporter of fossil fuels in the world, will never reclaim its pre-Ukrainian invasion proportion of the world's energy supply, according to the International Energy Agency (IEA).
The IEA predicts that Russia's share of the global energy market will drop from 20% in 2021 to 13% in 2030.
The demand for all fossil fuels is expected to peak or plateau globally for the first time in the agency's modeling history, according to the IEA.
As coal use declines over the coming years, natural gas demand reaches a plateau by 2030, and oil demand stabilizes in the middle of the next decade before declining, global emissions of fossil fuels that contribute to climate change will reach their peak by 2025.
"One of the effects of Russia’s actions is that the era of rapid growth in natural gas demand draws to a close," the IEA said, pointing to a rise in global demand for gas of less than 5% between last year and 2030.