The transition to cleaner energy is designed to make those systems more resilient, not less. But the actual switch will take decades, during which the world will still rely on fossil fuels even as major producers are now drastically shifting their output strategies.Article content
In other words: A strained global gas market triggered Europe’s record-setting spike for electricity prices — and the transition amplified it. To be clear, the transition itself — imperative for the planet — didn’t cause the squeeze. But any big, complex system can become more fragile when it’s undergoing major change.All this is happening at a time when power consumption is projected to increase 60 per cent by 2050, according to BloombergNEF, as the world phases out fossil fuels and switches to cars, stoves and heating systems that run on electricity.
In the U.S., natural gas futures have already more than doubled this year, before the peak demand that comes with the winter cold.In China, even as the government pushes to ramp up renewable power, the industrial economy still relies heavily on fossil fuels: coal, gas and oil. And when its factories started humming again during the pandemic rebound, the country simply didn’t have enough fuel.
Investors seeking the big returns that come from new businesses have been pouring money into alternative energy stocks rather than fossil fuel companies. Others are actively dumping coal and oil stocks, seeing them as a risk while the energy transition accelerates. And some fossil fuel companies have themselves started directing investments into the low-carbon future rather than focusing solely on their old role of finding, pumping and delivering more oil and gas.
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