NNext month World leaders will convene at the summit CopyA.D. By 2050, they want to create a way to reduce global carbon emissions to zero. As they prepare to play their part in this 30-year effort, the first major power threat of the Green Age is being witnessed. Oil, coal and gas prices have increased by 95 percent since May. Britain, the co-ordinator of the summit, has recalled its coal-fired power plants, US oil prices have risen by $ 3 a gallon, power outages in China and India, and Vladimir Putin have recalled Europe’s supply of oil to Russia. Volunteer.
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The shock reminds us that modern life requires a lot of energy. As the world shifts to a cleaner energy system, it is exposing itself to serious problems, including inadequate investment in renewable energy and some transitional fossil fuels, increasing geopolitical concerns, and weak security in energy markets. Without immediate reforms, there will be more energy crises and possibly civil unrest.
With global demand declining by 5% in 2020, the magnitude of such a deficit since World War II in 2020 seemed ridiculous, leading to a reduction in spending in the energy industry. However, with the slowdown in the global economy, stock prices have plummeted, and demand has risen sharply. Petroleum products are 94% below normal, European gas reserves 86%, Indian and Chinese coal less than 50%.
Narrow markets are vulnerable to shock and some renewable energy. The list of disruptions includes regular repairs, disasters, low winds in Europe, droughts caused by Latin American hydroelectric power, and Asian floods impeding coal transport. The world can still avoid a major power outage: its shortcomings will be solved and Russia and OPEC Anger may increase over oil and gas production. At the very least, the price will be high inflation and low growth. And more such compressions can be on the way.
Because there are three major problems. First, energy investment is halving the level required to meet the net zero demand by 2050. And the supply and demand for fossil fuels must be integrated in a coordinated manner without creating a dangerous imbalance. 83% of fossil fuels meet the demand for primary energy and this should fall to zero. At the same time, the mixture must be converted from coal and oil to gas, which is less than half of the coal emissions. However, legal threats, pressure from investors and fears of regulation have led to a 40 percent reduction in fossil fuels since 2015.
Gas is the pressure point. Many countries, especially in Asia, need to be bridge fuel in the 2020s and 2030s. As well as pipelines, most of the liquid natural gas enters the country (LNG). Very few projects are streaming. According to the Bernstein Research Institute, the global shortage LNG Capacity now could increase from 2% to 14% by 2030.
The second problem is that when geopolitical rich democracies stop producing fossil fuels and supply to the autonomous system, there are a few failures and low costs, including those led by Mr. Putin. Fuel output share from OPEC In addition, Russia today could grow from 46% to 50% or more by 2030. Russia is the source of 41% of European gas and its use of the North Stream 2 pipeline and growing markets in Asia is growing. The current threat is limited supply.
The last problem is the wrong design of energy markets. A.D. The decline since the 1990s has seen the market shift in electricity and gas prices, which have shifted from the declining government energy industries to open systems in many countries. But these are struggling to cope with declining fossil fuels, automation suppliers, and the growing reality of solar and wind power. Just as Leman Brothers relies on a one-day loan, some energy companies guarantee families and businesses that buy in an unsafe market.
The shock of the accident slows the pace of change. This week, Chinese Prime Minister Li Keqiang said the power transition should be “sound and good speed” as coal will be used for a long time. Public opinion in the West, including the United States, supports clean energy, but it could change at a high rate.
Governments must respond by adjusting energy markets. Larger security forces must cope with shortages and renewable energy shortages. Just as banks hold capital, energy suppliers need to have extra reserves. Governments can invite companies to bid for reserve-energy supply contracts. Most of the storage will be in gas, but battery and hydrogen technologies can eventually take over. More nuclear plants, carbon dioxide retention and storage, or both, are needed to provide clean energy.
A more diverse supply could weaken the control of autonomous petrochemicals such as Russia. It means building today LNG Business. In the long run, more wind-powered countries will need more international electricity to export renewable energy. Today, in rich countries, 4% of electricity is sold across the border, 24% of the world’s gas and 46% of oil. Building an underwater grid is part of the solution and can also help convert pure energy into hydrogen and transport it on ships.
All of this requires capital expenditure to double to $ 4trn-5trn per year. From an investment point of view, the policy is confusing. Many countries have a zero-zero pact but have no plans to get there and will still have to pay taxes and taxes when they meet with the public. Mobile subsidies make it very dangerous to invest in fossil fuels for renewable goods, and regulatory and legal barriers. The correct answer is a global carbon price that will continuously reduce emissions, allow companies to decide which projects to finance and support tax revenues. However, pricing programs cover only a fifth of total emissions. Shock message leaders b Copy26 Go beyond covenants and solve good publications about how the transition works. More than connected under charcoal bulbs. ■
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This article appeared in the print section of the article entitled “Power Shock”