IEA Chief Tells WEF World is Witnessing Biggest Energy Crisis Ever

Photo credit: Reuters

As Russia, which is a major oil and gas exporter, continues its war in Ukraine, the world is witnessing the biggest energy crisis ever recorded in history, stressed on Tuesday the executive director of the International Energy Agency (IEA), Fatih Birol, speaking at the World Economic Forum in Davos.

According to Birol, security concerns are driving the advancements which are happening in the renewables sector since energy security is the main driver of the growth of renewables as the unprecedented upheaval is giving a big boost to clean energy development.

Pointing out that the world we know has never ever seen a crisis of this depth – calling it the first global energy crisis – Birol explained that the main driver of renewable energy growth in the past were environmental reasons which led to clean energy and electric cars.

But since the Russian invasion of Ukraine in February, things have changed since Moscow was the number one energy exporter and oil exporter of the world and a major player in the coal market, so renewables were pushed much stronger for energy security reasons.

As renewable energy usage in 2022 increased by 25% compared to 2021, Birol further pointed out that the clean energy sector is not the only sector growing rapidly since it’s expected that by 2030, every second car sold in Europe, the US, and China will be electric while in 2019, only 3 cars out of 100 sold were electric.

However, he stressed that in order to accelerate the developments in the clean energy sector, adequate investments are needed that will mean that if the world wants to reach the sustainability target, today’s investments of $1 in fossil fuels and $1.5 in clean energy (ratio of 1 to 1.5) must increase to 1 to 9 ratio.

Birol also added that policy-wise, there’s also more structural response coming from the countries following the Russia-Ukraine war.

The European Union launched in May a set of measures to tackle the energy crisis triggered by the conflict, the REPowerEU plan, with the help of which it plans to invest up to €300 billion ($324.41 billion) to reduce demand for Russian gas.

The United States, on the other hand, offered a series of tax incentives on wind, solar, hydropower, and other renewables as well as a push towards electric vehicle ownership last year packed in its Inflation Reduction Act (IRA) it passed.

Be the first to comment

Leave a Reply

Your email address will not be published.