Key Points:
- Scientists need to find answers to support government action in the coming months to deal with a potential energy crisis.
- The Russia-Ukraine war destabilized the energy market, and fundamentally shifted its makeup.
- The current energy crisis is exacerbating social inequality within and between countries.
In an editorial in Nature, Simone Tagliapietra, researcher in the Faculty of Political and Social Sciences at the Università Cattolica del Sacro Cuore (Italy), outlined recently possible energy scenarios for 2023.
“In 2022, energy markets have been on a roller coaster, triggered by the Russian invasion of Ukraine, and, as a result, the Kremlin’s geopolitical use of natural gas flows to Europe,” writes Tagliapietra. “Thus, 2023 will be a crucial year to understand how the energy crisis will evolve and how it will affect the choices that will be made globally to ensure a more sustainable future.”
1. How will the map of global energy change?
The events of the past year have altered Russia's position in global energy markets and the shape of those markets. “New alliances are being built and old ones consolidated,” says Tagliapietra. For its part, the EU is approaching major gas suppliers, such as Norway, Algeria and the United States, as well as producers in Africa and the Middle East of liquefied natural gas. Russia is shifting lost European exports to Asia. Europe will see lasting reductions in its consumption of natural gas as a result of greater energy efficiency, a switch to green alternatives.
2. Will sky-high energy prices boost renewables?
The extent to which countries can fast-track the switch to green energy is a key question for 2023. High global oil and gas prices offer an incentive for households and businesses to install solar panels and heat pumps to lower their energy bills, as many did this year in Europe.
3. How will the industrial landscape shift?
High costs and limited supplies of energy will reorganize industries, including processes and locations. Some energy-intensive manufacturing sectors, including for aluminum, fertilizers and other chemicals, are starting to move to places offering cheaper energy, such as the United States or the Middle East.
4. What will the lasting economic impacts be?
Some economists predict that reshoring will slow the global energy transition as markets fragment. Researchers also need to watch what happens to the global division of labor that drove the development of clean technologies and slashed the cost of solar panels in the first place—a blend of innovation in the United States, Chinese investments in manufacturing and subsidies in Europe. If countries act in isolation and do so purely competitively, this virtuous circle might break.
5. How will the energy crisis affect climate action?
The ramifications here are potentially severe. Low- and middle-income nations are uneasy with Western responses to the energy crisis; rich countries that are turning to coal to replace Russian imports while calling on poorer nations to do their utmost to decarbonize seem hypocritical.
Information provided by Università Cattolica del Sacro Cuore.