Energy Markets in Russia after the Crimes of September 11, 2001: Pressure and Pressure on the Middle- and Low-Incommensurate Countries
Energy markets have been on a roller-coaster ride this year. Western countries imposed sanctions on Russia in response to its invasion of Ukraine. Russia cut its gas supplies to Europe in retaliation. Germany had to look for supplies other than energy. Middle- and low-income countries did not have access to affordable energy. fuel price increases spilled over into food markets in countries like Pakistan and Bangladesh.
Meanwhile, Russia is shifting its lost European exports east to Asia, mainly China and India (see ‘Oil and gas reshuffle’). It might end up as a junior partner in these relationships, especially with China. It could increase its influence in the fossil-fuel alliance if Saudi Arabia continues to annoy the United States.
Source: https://www.nature.com/articles/d41586-022-04467-w
Energy Solutions for the Growing Middle- and Low-Income Countries: Towards a Global Green Power and Solar Power System to Combat Climate Change
There is a question of how fast countries can switch to green energy. High global oil and gas prices (see ‘Energy cost hikes’; upper panel) 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. EU policymakers are working to make retrofitting buildings more energy efficient. The US passed the Inflation Reduction Act, which includes subsidies for manufacturing clean technologies domestically, and it should increase take up. There are policy shifts that need to be seen amid economic and political uncertainty.
Other energy solutions are also getting a boost, notably green hydrogen — obtained from water using electrolysis powered by renewable energy. In August, the Canada–Germany Hydrogen Alliance was announced and is aimed at aligning policies and investments to develop hydrogen supply chains. The EU is refocusing its energy trade ties with African nations, including Algeria, Nigeria and Namibia, towards green hydrogen and ‘power-to-X’ technologies, which use clean electricity to make synthetic natural gas, liquid fuels or chemicals that are carbon neutral.
The economic viability of new energy projects must be investigated. Some have been hastily proposed, rejigged or fast-tracked. In the next 5 years, the BarMar pipeline is a joint project between Spain, France and Portugal that aims to transport natural gas and green hydrogen through an underwater network. The technical viability of such infrastructure is still being established.
The value and feasibility of returning manufacturing and production of goods back to a country is questionable. China invested billions of dollars in becoming the dominant processing hub for solar power. The United States and European countries might be better served by concentrating on developing the next generation of technologies, including thin-film, non-Silicon solar panels.
Countries with reserves of key metals and minerals such as cobalt and lithium also need attention. They might not necessarily experience a ‘gold rush’: as the Middle East has seen for oil, resource wealth can foster conflict. In Nigeria and Venezuela, the domestic economy was affected by exports in foreign currency. Green extractivism can have economic and social impacts in low- and middle-income nations.
It is necessary to conduct research into the design of a global ‘loss and damage fund’ to compensate countries for the impacts of climate change. What type of fund should it be, what types of activity should it support, how much it should cost, and whether or not it can be funded by rich nations are all decisions that need to be made. If tensions between nations get too high, they risk stalling the climate talks.
High costs and limited supplies of energy will reorganize industries, including processes and locations. Decarbonization will take time, but it will be brought to a point where the effects are already being felt.
Researchers need to inform new business models to help heavy industry to adjust swiftly while remaining competitive. As the conditions and practices change, these models will need to be quickly refreshed. For example, petrochemical refineries will survive in the long run only if they switch to low-carbon liquid fuels and can commercialize them. How can the cost of clean products come down and what kind of public support might bring them to market quickly?
It is not known what supply chains will be used for green technologies. Production and transportation costs for green hydrogen need to be worked out. Ammonia is a promising way to transport such fuel over long distances, but the commercial prospects of this remain in question.
In the energy markets, governments made huge financial interventions. European governments have set aside more than US$743 billion in energy subsidies since last September to ease the pain for families and businesses facing record prices. Some energy companies were nationalized, including in Germany and France. The EU Energy Platform, which will pool purchases of natural gas (and later hydrogen), amounts to a cartel in the making. Researchers need to ask whether these events are temporary exceptions or lasting reorientations. What’s at stake is the idea of open global markets driving the effective allocation of scarce resources, rather than top-down state planning.
Clarifying trends in deglobalization and economic nationalism will come about in the coming year. Some economists think reshoring will slow the global energy transition. Researchers also need to watch what happens to the global division of labour 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.
Researchers must evaluate the implications for national policies and multilateral aid, lending and development policies. They should know how energy poverty, energy price shocks, and energy-related inflation affect social cohesiveness and threaten political stability. Protests in the United Kingdom and the Czech Republic have shown that rich nations can be affected.
The ramifications here are potentially severe. Poor countries are uneasy with the Western responses to the energy crisis and they are not comfortable with the rich countries calling for them to decarbonize.
The energy crisis is an opportunity as well as a challenge. As the clock ticks over into 2023, researchers must deliver answers to protect the green-energy transition.
The promises of the $8.5 billion are yet to materialize. There is a discussion going on about the terms of the agreement between South Africa and industrialized countries. South Africa proposed a transition plan at the climate summit in Egypt last year which included solar and wind farms, battery development and building electric vehicles, all of which could create jobs.
Right. A new plan to solve the immediate energy problem was unveiled by President Cyril Ramaphosa. While it included diversifying energy sources to include renewables, the main focus was to fix the existing plants. The majority of them are coal-fired.
The main obstacle is the energy crisis. South Africans don’t want a solution that takes a long time. There’s also political opposition. The most powerful opponent is the energy minister, who is seen as one of the lieutenants.
There is corruption after that. In an interview, the former head of the utility said that he was worried about attempts to weaken governance around the $8.2 billion from the transition deal. The response was that in order to pursue the greater good, some people have to eat a little bit.