Investments in low-carbon energy need to triple if the world is to meet its Paris Agreement targets, the head of the International Energy Agency told the Financial Times.
“There is a gross mismatch, and the longer this mismatch persists the greater the risk of further sharp price swings and increased volatility in the future,” Fatih Birol said, noting that current levels of investment in clean energy were just a third of what was needed.
However, Birol also said that projected investments in oil and gas production were now in line with Paris Agreement climate targets. That’s a rare piece of good news for an industry that has become the target of constant accusations of being the sole party responsible for adverse climate changes.
The IEA expects gas demand to peak soon after 2025, Birol also said, adding that oil demand was also about to peak in a little more than five years, even if world governments make no new commitments about climate change. Oil demand, according to the IEA, would peak at 97 million bpd, although in an earlier forecast for the short term, the IEA estimated that oil demand would reach 100.6 million bpd next year. This is well above its latest peak level.
Global investments in energy this year, according to the IEA, will rise to $1.9 trillion, of which $370 billion are investments in low-carbon power generation.
In his interview with the FT, Birol also once again said that renewable power was not to blame for the energy supply crunch in Europe, adding that the crisis must not divert European leaders off their energy transition course.
“There is an inaccurate campaign that’s saying we’re seeing the first crisis caused by clean energy and that this can become a barrier for further policy action to address climate change. But this is definitely not true,” Birol said.
According to him, the crisis was the result of a variety of factors, including an uneven recovery from the pandemic, gas supply outages, and the weather.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
- Will The U.S. Be Spared From The Global Energy Crisis?
- Canada’s Oil Stocks Are Trading At Bargain Basement Prices
- This Key Indicator Is Pointing To Higher Oil Prices