Energy markets were shaken by the Russian invasion of Ukraine. Perhaps paradoxically, this is also acting as a catalyst to accelerate underlying trends in the energy mix towards clean energy.
- The fallout from the Russian invasion of Ukraine has triggered an energy crisis. Perhaps paradoxically, this is also acting as a catalyst to accelerate underlying trends in the energy mix towards cleaner energy provisioning.
- The short-term impact of the crisis is increased use of fossil fuels; the long-term impact is the opposite. Higher energy prices as well as the need for energy security are pushing countries, especially in Europe, to an acceleration towards renewables while reducing fossil fuels, especially gas.
- This is reflected in our updated benchmark outlook, based on the Announced Policies Scenario (APS) of the International Energy Agency (IEA), in which fossil fuel prices are higher and global energy demand is lower and cleaner by 2050. The temperature rise is limited to 1.7 degrees Celsius.
- With an improved APS, steps are arguably being taken towards the Net Zero Emissions 2050 scenario (NZE), in which net emissions of CO2 are zero and the temperature rise is limited to 1.5 degrees. To achieve net zero, and even the APS, daunting investments (and efforts) are needed.