Russia’s war in Ukraine is spurring investments in renewable energy

The upheaval in oil and gas markets sparked by Russia’s war in Ukraine is helping boost clean energy as countries struggle to secure their electricity supplies.

A remarkable record: Last year, investment in solar energy exceeded that for the first time, according to the International Energy Agency, which released a report this week. Global Energy Investments.

But the world is still investing too much in fossil fuels, the Paris-based group warned. The IEA said investment in the sector is currently double the maximum amount that would be allowed if nations met their stated commitments to reduce emissions.

A growing gap

As of 2018, far more funding has gone into clean energy development than fossil fuels, and the gap continues to widen. A record $2.8 trillion was invested in the energy sector globally last year, of which $1.7 trillion was dedicated to clean energy.

“For every dollar invested in fossil fuels, about $1.7 is now going into clean energy. Five years ago, the ratio was one to one,” IEA Executive Director Fateh Birol said in a statement. “A shining example is investment in solar energy, which is poised to surpass investment in oil production for the first time.”

of Russia A brutal attack on Ukraine That started last year, which led to increased demand for all forms of energy, leading to increased investment in fossil fuels as well as clean energy. The war triggered a spike in oil and gas prices, of which Russia is a major producer – supplying about 12 percent of the world’s crude oil and about half of the European Union’s natural gas.

Investors doubled down on all options, developing gas and oil sources outside of Russia, as well as investing in new renewable energy developments that don’t require gas at all.

Natural gas is a fossil fuel that contributes to global warming. While it was long considered “cleaner” than older fuels like coal and oil, recent research suggests it may be much more so. harmful to do Climate As previously thought, its extraction releases large quantities. Methanea powerful heat-trapping gas.

The sharp increase in clean energy investment bodes well for the world’s commitment to meeting its climate goals. If the pace of the past two years continues, “then in 2030 low-emission power, aggregate spending on grids and storage, and end-use electrification could exceed the levels needed to meet the world’s announced climate commitments.” Gay,” the IEA wrote. “For some technologies, notably solar, this is equivalent to the investment required to get on track for a 1.5°C stabilization of global average temperature.”

However, this could only happen if planned oil and gas development is scaled back significantly, the IEA warned.

“The risks of fossil fuel phase-out are clear: fossil fuel investment in 2023 is now more than double the level needed to meet the world’s much lower demand. [net zero emissions] scene,” the report found.

Fossil fuel prices pose a dilemma.

Still-high fossil fuel prices, and last year’s record profits for oil and gas companies, have created a dilemma for investors, who are eager to capitalize on commodity prices.

“A key dilemma for investors to undertake large, capital-intensive gas supply projects is the combination of strong near-term demand growth with uncertain and likely long-term demand declines,” the IEA wrote. How to do it.”

If the clean energy boom is to continue, the agency said, another critical point needs to be addressed: equity. So far, clean power investment has been limited to only a few countries – mainly China, the European Union and the United States

“Notably, the increase in clean energy investment in advanced economies and China from 2021 is higher than clean energy investment in the rest of the world,” the IEA found.

The IEA said the high costs of clean energy infrastructure and high interest rates mean many developing countries are not investing in renewables, even though they are cheaper to use than fossil fuels in the long term. Will come and lives will be saved.

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