IEA Director: Energy prices will continue to rise without increased investment in renewables
Global energy market volatility and further price increases will continue without a major boost from clean energy investment, warns the International Energy Agency.
Executive Director Fatih Birol believes the transition to net carbon emissions will remain unstable unless future energy needs can be financed.
As economies shift away from fossil fuels and less sustainable industries, consumer demands for consumption must be met through investments in clean energy across all technologies and markets.
He said: âThere is an imminent risk of further turbulence for global energy markets. We are not investing enough to meet future energy needs, and uncertainties set the stage for a volatile period ahead. “
Birol set out his perspective in the institute’s Global Energy Outlook for 2021, which was released amid an energy price crisis in Europe and Asia.
Past oil prices remain at $ 82.88 per barrel on the Brent Crude Index, slightly below its high of $ 84 on Monday, but this remains a marked increase from its cost of trading of $ 73.07 per barrel. September 20 before his multiple rallies in the following weeks.
Meanwhile, across the pond, the WTI index crossed the $ 80 threshold this week for the first time since 2014, currently at $ 80.48.
Instability over skyrocketing wholesale costs has already led to the bankruptcy of three UK energy companies such as Igloo, Symbio Energy and Enstroga in the past month. There is now speculation that four more companies are on the brink.
The IEA warned in its outlook that the crisis has led to a sharp rebound in coal and oil use, putting the world on track for the second annual increase in carbon emissions in history this year.
The report also says investments in clean energy and infrastructure need to triple over the next decade to meet net zero targets for carbon emissions by 2050.
He suggested that current climate commitments would result in only 20% of the planned emission reductions needed by 2030, which is critical to putting the world on the path to net zero by 2050. This should be split between developed and emerging economies around the world.
Birol believes that while a new economy based on clean energy is emerging, the pace of progress remains too slow.
He said: âReaching this path requires investments in clean energy projects and infrastructure that are expected to more than triple over the next decade. Some 70% of this additional spending must be made in emerging and developing economies, where financing is scarce and capital remains up to seven times more expensive than in advanced economies.
The institute sees its outlook as a guide for the upcoming Cop26 climate conference in Glasgow, which aims to maintain a 1.5 degree temperature rise as an achievable goal.
As it stands, the IEA believes that current climate commitments are too modest. Measures already announced by governments would still result in a 2.1 degree temperature rise by 2100, while implemented policies still leave the world on track for a 2.6 degree increase. They also predict that demand for oil will not peak until the mid-1930s without further action.
By city AM
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