And the recent rise in coal use may prove fleeting. European nations are currently planning to install roughly 50 gigawatts worth of renewable power next year, which would be more than enough to supplant this year’s increase in coal generation. And globally, the agency does not expect investment in new coal plants to increase beyond what was already expected.
Russia, which had been the world’s leading exporter of fossil fuels, is expected to be hit especially hard by the energy disruptions it has largely created. As European nations race to reduce their reliance on Russian oil and gas, Russia is likely to face challenges in finding new markets in Asia, particularly for its natural gas, the report said. As a result, Russian fossil fuel exports are unlikely to return to their prewar levels.
But even though the current energy crisis is expected to be a boon for cleaner technologies in the long run, it is exacting a painful toll now, the report found.
Governments around the world have already committed roughly $500 billion this year to shield consumers from soaring energy prices. And while European nations currently appear to have enough natural gas in storage to get them through a mild winter this year, the report warns that next winter in Europe “could be even tougher” as stocks are drawn down and new supplies to replace Russian gas, such as increased shipments from the United States or Qatar, are slow to come online.
The situation looks even more dire in developing countries such as Pakistan and Bangladesh, which are facing energy shortages as deliveries of liquefied natural gas are diverted to Europe. Nearly 75 million people around the world who recently gained access to electricity are likely to lose it this year, the report said. If that happens, it would be the first time in a decade that the number of people worldwide who lack access to modern energy has risen.
There is still a possibility that soaring energy prices could produce social unrest and pushback against climate and clean energy policies in some countries. While the report concluded that climate change policies are not chiefly responsible for the spike in prices — instead, it notes that renewable power and home weatherization efforts have actually blunted the impact of energy shocks in many regions — there is always the risk that governments could feel pressured to change course, Dr. Birol said.
The new report comes less than two weeks before nations are set to gather at U.N. climate talks in Sharm el Sheikh, Egypt, where diplomats will discuss whether and how to step up efforts to curb fossil fuel emissions and provide more financial aid from richer to poorer nations.
