IEA World Energy Outlook (WEO) 2022 report
Amid the global energy crisis caused by war in Ukraine, the World Energy Outlook 2022 report was released to provide insights into the implications of this global energy shock.
What is WEO?
The WEO is the world’s most comprehensive and authoritative assessment and projection of global energy sector. It is an annual report published by International Energy Agency (IEA) since 1998. It provides comprehensive insights into the global energy supply and demand in different scenarios and their impact on energy security, climate targets and economic development.
What are the key findings of the 2022 report?
- Russia’s invasion has exacerbated the energy crisis that was already triggered by supply disruption caused by the pandemic.
- Russia has been the world’s top exporter of fossil fuels. However, its supply curtailments to Europe and European sanctions on imports of oil and coals from Russia have increased energy prices significantly.
- While all fuels are effected by the Ukrainian crisis, gas markets are the main victims since Russia is looking to take advantage of its market position by exposing consumers to high energy bills and supply shortages.
- Natural gas prices have reached unprecedented levels. They are consistently exceeding the equivalent of USD 250 per barrel of oil.
- Coal prices have also reached unprecedented levels and price of oil was higher than USD 100 per barrel in mid-2022 before decreasing again.
- The energy crisis caused by Ukrainian conflict has created a risk of recession.
- It enabled fossil fuel producers to record a 2 trillion USD windfall above their 2021 net income.
- High energy prices has also worsened food insecurity in many developing countries.
- Around 75 million people who have recently gained access to electricity will be unable to pay their energy bills. This means that, for the first time since the IEA started tracking energy access, the total number of people lacking electricity access is increasing.
- Over 100 million people are likely to increase their dependence on firewood for cooking instead of adopting cleaner and safer solutions.
- Though some have blamed climate policies and net zero commitments to the increase in energy prices, there is no evidence to support this.
- In most affected regions, higher shares of renewable energy sources reduced the energy prices significantly. It also eased access to electrified homes for many.
Category: Reports & Indexes Current Affairs
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