IEA believes the Gaza conflict accelerates the shift to renewable energy

Saving the planet is a goal pursued, at least in words, by all means. Some actions or statements may be challenging to explain or justify, but the ultimate purpose seems to excuse the means even in this case. The tensions caused by the Gaza conflict could help accelerate the abandonment of environmentally harmful fossil fuels such as oil and natural gas in favor of renewable energy, electric cars, and heat pumps, similar to how the significant rise in oil prices in the 1970s triggered efforts to conserve fuel. This is stated in the annual report "Global Energy Perspectives" published by the International Energy Agency (IEA).

"Today, we are facing a crisis in the Middle East that could once again cause a shock in oil markets. These developments come alongside the challenges facing energy markets following the cutoff of European natural gas supplies from Russia due to the invasion of Ukraine," said Fatih Birol, the Executive Director of the IEA. "Combine the two, and no one can convince me that oil and natural gas are secure energy options for countries and consumers. These developments can accelerate the global energy transition. Renewable sources, such as wind or solar energy, offer long-term solutions to energy security problems and climate change," Birol said in an interview with the Associated Press. Investors are concerned about the potential escalation of the Middle East conflict, which has led to moderate increases in oil prices. Fossil fuel prices have fallen from their peak levels in 2022, "but the markets remain tense and volatile. Some immediate pressures from the global energy crisis have eased, but energy markets, geopolitics, and the global economy are affected, and the risk of new turbulence is increasing," the IEA report states.

Birol emphasized that, unlike the crisis of the 1970s, "this time we have all the available technologies. We have wind energy, solar energy, nuclear reactors, electric cars. They have expanded significantly on a global scale and will provide additional support for the energy transition." Electric vehicle sales are on the rise. In 2020, only one in 25 cars was electric, and by 2023, it was one in five. Meanwhile, the share of fossil fuels in electricity generation has decreased from 70% a decade ago to 60% today, and it is expected to reach 40% by 2030, according to the IEA's chief.

The IEA expects that demand for fossil fuels will peak before 2030 under current policies, but governments must intensify their efforts to accelerate the transition to meet global climate goals. The IEA's report contrasts with that of OPEC (the Organization of the Petroleum Exporting Countries), which estimates that the demand for oil will continue to grow well beyond 2030 and calls for significant investments in the oil sector. The peak level of demand for oil, natural gas, and coal is visible in this decade in the IEA's baseline scenario based on current government policies. By 2030, the IEA expects a tenfold increase in the number of electric vehicles globally, supported by clean energy policies in major markets.