Energy crisis will lead to more secure, greener future, International Energy Agency chief says

The global energy crisis that has triggered soaring fossil fuel prices and inflation will accelerate the green transition and the end result will be a more secure and cleaner energy future, said the head of the International Energy Agency (IEA).

Dr Fatih Birol also questioned the wisdom of the Opec+ cartel’s decision this month to cut its oil production target by two million barrels per day, calling the move unprecedented and going against all expectations.

The move came even though global fuel supplies remain tight. Opec+ comprises the Organisation of Petroleum Exporting Countries (Opec) and other producers including Russia.

Dr Birol feared that the energy crisis could deepen the mistrust between rich and poor nations and risk deeper geopolitical fracturing, with high energy prices especially hurting developing nations.

He said that while the crisis was painful, he was optimistic that clean energy investment will continue to rise, based on recent plans adopted by big greenhouse gas polluters, such as the United States and the European Union.

“The question people ask me: Do you think this will slow down or accelerate the clean energy transition? My answer is very clear; this will accelerate the clean energy transition,” said Dr Birol, executive director of the Paris-based IEA, who will be giving a keynote address on Tuesday at the start of the energy week at the Sands Expo and Convention Centre.

He pointed to the US’ recently passed Inflation Reduction Act, which provides US$369 billion (S$522 billion) in tax incentives and guarantees for renewable energy, electric cars, hydrogen and other cleaner sources of energy.

With Russia cutting off gas supplies and facing sanctions for its invasion of Ukraine, Europe’s €210 billion (S$294 billion) REPowerEU scheme aims to accelerate renewable energy investment to wean the continent off Russian fossil fuels well before 2030.

Japan, China and India also have major green energy investments, Dr Birol added. “I think this will be a turning point in the history of energy and we will see a much more secure and cleaner energy future,” he said.

Turning to Asia, he said the region is a vital player in the green transition and a key growth engine for the global energy market.

The region has been a focus of the IEA in its efforts to expand its membership, now comprising 31 member countries and 11 association countries, which covers about 80 percent of global energy consumption.

Dr Birol said Singapore and the IEA are exploring the possibility of setting up a regional office in Singapore. This would be the first such office outside Paris. Discussions are still preliminary, he said, but he hoped that a greater regional presence will help drive Asean’s clean energy future.

 

SOURCE: NEWS AGENCIES