Much angst is accompanying the recent surge in energy prices as ordinary folks and governments grapple with a multitude of consequences – affordability, access, security, reliability, resilience, environment, political dynamics, and economies are all at risk from perceived and actual shortages. The price increases are a consequence of market balances that have been stressed on the supply side, on available storage capacity, and on the demand side as well as from increasing costs of carbon. A blame game is in play, ranging from accusations of market manipulation to acknowledgement of poor anticipation by the industry of a rapid demand surge post-COVID.
The latter is of course an optimistic view that we are indeed “post-COVID”.As economies emerge from the COVID 19 pandemic, it appears we are reverting to previous patterns of economic and energy activity rather than setting a new course. Rather than building back better we are blundering forward blindly. Energy demand has risen to levels that would have been expected in 2018 for late 2021 even if COVID had not happened. Calls are going out to increase supply, whether for supply of oil or for increased power generation from coal-fired power plants.
Reliability and affordability remain priorities for energy markets, and those priorities are not subordinated to climate change objectives.In terms of priorities, keeping the lights on remains number one. The clear expressions of priorityput in stark relief the challenge the world faces in addressing the existential threat that climate change representswhile deliveringreliable and affordable energy services.
We have witnessed extraordinary events over this past year weather-wise, with floods, fires, violent storms, energy disruptions – the list goes on.UNECE previously observed that it was 10 past midnight on the climate change doomsday clock. Today we note that it is 30 minutes past midnight! The world is not catching up on lost time.
We are falling farther behind and we are way beyond late in acting seriously. The costs and the stresses of mitigation would have been so much lower had we reacted when the first warnings were issued in the late 1970s. Now we face a much steeper and harder climb, and every day we delay it gets that much harder.
Every country has its own endowment of natural resources and its own cultural, regulatory, and legislative heritage.
Each country has its own unique pathway to a future that meets the objectives of the 2030 Agenda and the Paris Agreement. Energy remains the critical sector :
- It underpins quality of life,
- It is the source of most greenhouse gas emissions, and
- It can be transformed in ways that address our challenges and meet our objectives with integrated solutions.
The current energy crisis is making the path to a sustainable energy future more difficult, but it remains doable.UNECE has called on countries to deliver high performance buildings, to reduce losses of methane, and to work to carbon neutrality while remaining agnostic and pragmatic on technology choices. We cannot reject nuclear power or fossil energy with carbon capture and storage if alternatives are not available at the needed scope and scale. We will not be able to act seriously on either climate or development if we are leaving entire communities devastated socio-economically, so we have an imperative to pursue a “just transition”. Countries need to align their resource investments with the climate and sustainable development agendas. We also consider it important to prepare an energy ecosystem of the future that embraces electrons and molecules. Hydrogen is often mentioned, but so too should be renewables gases and a decarbonized power system.
Scott Foster joined UNECE in 2011 as Director of Sustainable Energy. Mr. Foster previously was Managing Director of Nomad Energy Consulting, Vice President of global regulatory affairs with AES Corporation, Senior Director for global power with Cambridge Energy Research Associates, senior expert on electricity at the International Energy Agency, and hydroelectric engineer at Pacific Gas & Electric Company.