CNBC published a piece earlier this summer, indicating that many energy experts are projecting a 10% rise in coal investments this year due to increasing worries around energy security worldwide.
Below, we break down this article for you and look at the buzz around increased fossil fuel investment, clean energy resources, and how nuclear energy can open the door to an even better and more secure future in energy.
Current State of the Energy Market
According to the International Energy Agency, global investments in energy are expected to increase by more than 8% this year, hitting $2.4 trillion. Part of the increase includes a notable uptick in coal supply chains. But still, a lot more money is required to meet climate goals.
The report released by the International Energy Agency in June found that clean energy investment will exceed 1.4 trillion in 2022, accounting for nearly three-quarters of the growth in overall energy investment.
This is undoubtedly good news, but the agency still pointed out the work that still needs to be done.
“We cannot afford to ignore either today’s global energy crisis or the climate crisis, but the good news is that we do not need to choose between them — we can tackle both at the same time,” IEA’s executive director, Fatih Birol said.
Birol believes the only lasting solution is a “massive surge” in investments to help accelerate the transition to clean energy, including to help ease the pressure from high fossil fuel prices on consumers, make energy systems more secure, and get the world on track to reach its climate goals.
While the agency is happy to accept the investment, it is concerned about how unevenly clean energy is distributed, with the majority coming from advanced economies, such as China.
Coal is a market that’s seeing particularly high investment. In fact, according to the IEA report, $105 billion was invested in the coal supply chain in 2021, a 10% increase from 2020 — the agency expects it to jump another 10% this year.
Global Unrest and Its Effects
The report comes at a time of global unrest amid rising inflation and oil prices and the war in Ukraine — all of these challenges have created a tough environment for businesses, governments, and consumers alike, including the energy sector.
For example, the cost of solar panels and wind turbines, two technologies many consider to be critical for the energy transition, are up between 10-20% since 2020. In fact, rising costs are getting so high that almost half of the nearly $2 billion investment will be eaten up by the higher costs instead of being spent on energy supply and savings. What’s more, the IEA report found that total spending on energy or consumers will bypass $10 trillion for the first time this year. Lawmakers are working to ease the burden of these skyrocketing costs on consumers.
A Return to Coal
Amid the Ukraine-Russia conflict, a number of world powers are coming up with plans to reduce their reliance on Russia for hydrocarbon. Some European governments, including Germany, Italy, Austria, and the Netherlands, are even considering returning to coal to avoid counting on Russian resources.
Inflation Reduction Act Supports Nuclear & Fossil Sectors
Amid the rising investments in coal, nuclear energy is another area with a bright future. Nuclear energy has a whole host of benefits, including being one of the lowest carbon energy sources with one of the smallest carbon footprints. It’s also reliable and cost-effective. As countries look for more sustainable options for energy, they are turning to nuclear energy. Uranium, the raw material used to create nuclear energy comes from stable regions in the world and is widely available, making nuclear power a long-term and low-carbon option for the energy of the future.
Additionally, the Inflation Reduction Act signed into law August 16th, includes $369 million to address domestic energy security and climate change. It recognizes the indispensable role that nuclear power plays in our nation’s energy policy by allowing a variety of tax credits and incentives for existing nuclear power plants. It also provides tax incentives that will benefit coal-fired and natural gas-fired power plants.
We are optimistic about the future of the power generation market and a sustainable, clean, and secure power grid.
コメント