Energy crisis unfolding – what will it mean for the long term?
Energy Perspectives 2022: Long-term development in the world’s energy markets and how politics, technologies, companies, and consumers can influence it, is an overarching theme of the energy transition.
To bring the world on track to address long-term sustainability challenges in a balanced manner, trust, cooperation, and burden-sharing must be established. This will take time and is by no means guaranteed, especially when geopolitical conflicts rise on the political agenda.
“Russia’s invasion of Ukraine earlier this year has not only tragically impacted the lives and livelihoods of those directly affected, but the associated geopolitical tensions have also further deteriorated global cooperation, trade and supply flows on which a sustainable energy transition is completely dependent,” says Eirik Wærness, chief economist in Equinor.
Security of supply has come to the forefront of the energy policy agenda, with rising prices and significant increases in overall cost of living, keeping energy affordability firmly on the agenda. The climate challenge will remain as a long-term driver for decarbonisation of our energy system. Nevertheless, short- to medium-term focus should also be expected on those options addressing increased energy security and affordability.
“In these testing times, we must stay focused on the longer-term transformative measures and structural changes needed for a sustainable energy future. Reaching the goals of the Paris Agreement is an immense challenge and will require continuous engagement, collaboration and commitment from governments, industries, investors, and consumers alike,” says Anders Opedal, President and CEO of Equinor.
Energy Perspectives is an independent report prepared by Equinor analysts. This year, the report presents two distinct scenarios for the world economy, international energy markets and energy-related greenhouse gas emissions. The scenarios are not predictions but possible contrasting pathways, providing a platform for debate and decision making.
The two scenarios, Walls and Bridges, illustrate very different future pathways. They aim to highlight the immense challenges that must be overcome to make the move from the slow, incremental changes that characterise the energy transition today (Walls), to the radical changes needed to move the world onto a path aligned with the 1.5°C ambition of the Paris agreement (Bridges).
“Walls divide and bridges connect. Our new scenarios paint a large outcome space for what the long-term energy future might look like based on choices made today and going forward,” says Wærness.