The Current Energy Crisis is global!

The Current Energy Crisis is global!

The globe is currently experiencing one of the biggest energy crises in decades! And we started witnessing a tremendous transformation in the energy world!

According to Fatih Birol, the Executive Director of The International Energy Agency, energy markets and policies have changed as a result of Russia's invasion of Ukraine, not just for the present but for decades to come, and he continued, the world is currently experiencing the first really global energy crisis.

And according to the IEA research, the current energy crisis is delivering a shock of historic breadth and complexity. It also stated that the primary temblors were felt in natural gas, coal, oil, and electricity. Market conditions for natural gas are already tight and predicted to get worse in 2023!

The turmoil caused by the conflict in Ukraine and the COVID pandemic may be one of the major drivers for the clean energy revolution, claims the International Energy Agency. And in response, governments all across the world pledged to make this a historic turning point that would lead to a cleaner, more accessible, and more secure energy system.

The reasons behind the current energy crisis

The invasion of Ukraine by Russia in February disrupted the world energy market as Russian oil imports are already prohibited in the United States, and Europe will follow suit in December. And in response, Russia's state-owned energy firms have curtailed natural gas exports to Europe!

Furthermore, Birol warned that this winter won't be the hardest for Europe, but the next winter will be potentially much worse! During the first half of this year, the EU might stock up on Russian pipeline gas because it is unlikely that it will be available again next year, which will cause a supply gap that other suppliers would find difficult to fill.

Before the conflict, there was already a shortage of energy worldwide. Natural gas production has decreased since the pandemic's early stages as the world's energy demand has plateaued. In 2020, The International Group of Oil Producing Countries (OPEC) approved production restrictions that were both unprecedented and repeated earlier this month to boost oil prices.

The energy issue is acute in developed economies like those in Europe, Bangladesh, and Pakistan, which are struggling with extensive blackouts and power outages because they are unable to afford the rising energy prices.

The IEA warned that the energy situation would worsen because there are no new fuel projects anticipated to start anytime soon. But the increased emphasis on sustainable technologies like energy-storage batteries and electric vehicles, as well as renewables like wind and solar, has been a positive aspect of the crisis so far. According to the IEA, these energy sources and technologies have reduced the impact in many regions around the world.

Clean energy revolution

As natural gas prices increase the cost of electricity production by 50%, the IEA warned that electricity bills will increase across the world as a result of high fossil fuel prices and asserts that a clean energy transition could be a solution to the energy crisis because prices for renewable energy have only had a little impact in driving up electricity costs.

The organization also noted that after the current energy crisis is over, there could be a massive interest in renewable energy and clean technologies, including electric vehicles, that could even outpace global emission reduction targets in some regions.

And according to the IEA, the amount of renewable energy used at the moment is "far from enough" to ease the present energy problem for consumers and countries, but global renewable energy investments are expected to increase by more than 2$ trillion by 2030!