Sabancı University Istanbul International Center for Energy and Climate (IICEC) addressed the energy crisis, one of the number one crises in the world, at a conference titled “World Energy Crisis: Solutions & The Role of Renewable Energy” held in Istanbul.
The launch presentation of the ‘Turkey Renewable Energy Outlook 2022 Report’ prepared by IICEC was also held at the conference.
Among the names attending the conference, International Energy Agency (IEA) President and IICEC Honorary President Dr. While explaining how Europe will overcome 2023 and how the crisis affected 3 regions, Fatih Birol also made special statements to Haberturk.com.
“WE CAN CALL 2022”
Birol said, “Russia used to be the world’s number 1 energy exporter, but that is now changing. In order to look at the energy crisis in the world, first of all, it is necessary to look at February 24, the day Russia invaded Ukraine and after. The steps taken in this process caused the 1st Global Energy Crisis. We are in the midst of a global energy crisis. Inflation rates in many countries of the world, even almost all of them, have reached levels that we have not seen in 40 years. Many countries in the world, including the EU, are in danger of going into recession. It is said that ‘2022 has been a bad year, we are leaving it behind thanks to Allah’. Which is true, but I think it’s a populist approach because; 2023 will be a much more difficult year. In other words, we may even be able to call 2022,” he said.
“VICTIME NUMBER 1 WILL BE DEVELOPING COUNTRIES”
Birol said, “There are two questions. First; ‘How does the crisis affect countries and how will it affect them?’ For this, it is necessary to look at three regions; developing countries, Europe and Russia” and emphasized that the number one victim of the crisis to be experienced in the coming years will be developing countries, African countries.
Birol also stated that although Europe has been warned about ‘resource diversification’ for the last 5 years, they realize the problem now and that they should self-criticize because they have been tied to a single country for decades when the crisis is over. Birol said, “As of now, Europe seems to be going through this winter, even if it is hurt, but I think the main problem will be the winter of 2023-2024,” and emphasized that the second bad news for Europe will be the industrial sector, which is the backbone of the region. “As the cost of energy increases, the cost of production will increase as well. If measures are not taken, a slowdown can be seen in important industrial sectors, which are also the cradle of employment,” he said. However, despite all this, Birol once again emphasized that Europe has taken the right steps despite all the difficult conditions, and that with courageous and unprecedented steps, at least this winter can be explained with less damage.
“RUSSIA LOSE ITS BEST CUSTOMER”
Birol, who stated that Russia was in a difficult situation contrary to his statements, said, “As of February 24, 55 percent of Russia’s total oil exports and 65 percent of its total natural gas exports were going to Europe. Europe was actually a pretty good client. But Russia lost its customer by a large margin with the war. It is very difficult for Russia to find new markets to replace Europe. To explain with an example, it takes an average of 6 days for oil to arrive in Europe, and 56-57 days to Asia. It will face a serious problem there and it will cause significant income loss,” he said, adding that the global energy crisis did not bring good things for both developing countries, Europe and Russia.
DID THE CRISIS AFFECT THE TRANSITION TO RENEWABLE ENERGY?
So, is it possible to say that the crisis has accelerated the transition to clean energy despite all the difficulties?
The President of the International Energy Agency states that this is possible:
“For this Let’s look at a few reasons. Renewable energy in the world today There is tremendous progress. In the next five years, the world’s renewable energy capacity will increase by 2400 gW. This is a ratio worth the increase the world has made in the last 20 years. This year, The increase in energy efficiency was twice the increase in average years. The reason for this is again both the incentives and the steps taken by the governments in this area. Finally, electric cars. While 4 out of every 100 cars sold in the world in 2019 were electric, approximately 15 of every 100 cars sold in the world today are electric. According to our estimates, one out of every two cars sold in the world’s three largest markets America, China and Europe by 2030 will be electric.”
Stating that the response of governments from the global energy crisis will accelerate the transition to clean and reliable energy technology, Birol cited developments in energy security, industrial policies and climate change as three reasons for this. Birol emphasized that the main driving force is energy security, not climate change, contrary to what countries have stated.
At the end of the conference, Birol Haberturk.com’s İrem Kuşoğlu answered Görgü’s questions.
“EUROPE WAS LUCKY THIS YEAR”
Birol “In our last interview, you said, ‘We are in the middle of a global energy crisis’, and you continue to say it. In this context, European and Western countries are taking precautions. This includes the ceiling price application. In addition to the countries, some measures are taken and sanctions are applied individually. At the conference, you said, ‘The real problem for Europe will be 2023-2024’. In this context, what should Europe do to minimize the risks?” gave the following answer to the question:
“In Europe, these risks have decreased considerably for 2022, that is, this winter, because the natural gas storages in Europe are around 90 percent full. If nothing major goes wrong, that is, a long and cold winter that we never expected, Europe will spend the winter in bruises. But when we spend this winter, when we come to February-March, the level from 90 percent will decrease to 30 percent. Now for next winter, it is very difficult to increase it from 30 percent to 80 percent to 90 percent again. Firstly, Europe is still buying Russian gas this year. In a normal year, he was getting 50 percent bcm, this year it dropped to 60 bcm, but he got it. It probably won’t happen next year. Second, the new LNG supply to the world by next year is around 20 bcm, the lowest rate ever. That’s about half the historical average. Plus, China’s economy has been weak this year due to COVID-19 restrictions. And while China’s LNG imports have increased every year, they have decreased this year. But next year it will increase. In other words, China will receive most of its already scarce LNG supply, and Europe will not have much left. Thirdly, we were very lucky in Europe this year because we had a very mild winter. If the seasons return to normal next year, it will be really difficult. In my opinion, the winter of 2023 in Europe is a candidate to be much more difficult than the winter of 2022.”
“EUROPEAN COMPANIES CAN GO TO THE USA”
Recently, the USA has been trying to take serious measures with its energy incentive packages. So, can companies in Europe go to the USA after the incentives?
Birol said, “Absolutely. Let me tell you, one of the largest petrochemical plants in Europe and Germany is currently moving a significant part of it to the USA. In fact, we recently met the CEO of one of Europe’s most important electricity companies at Charles de Gaulle Airport in Paris. When I asked where he was going, he said, ‘I am going to the USA. Because we will make our investment there, battery investment,’ he said. Because they get a huge incentive, and their tax exemptions multiply. Extremely profitable investments. I think that many production plants in Europe could go to the USA. The only way to prevent this is for Europe to introduce similar measures. We are also working with the European Union on this issue. We are again developing a master plan together with Mr. von der Leyen. I hope this will be good for Europe, it is important for us and for Turkey. Because almost half of the trade in Turkey is done with Europe”.
“FUSION ENERGY NOT TODAY, BUT LONG AFTER TOMORROW”
So, is the fusion energy development announced by the USA the agenda of the near future as it is thought? “The answer to this question is easy,” said Birol, “Not for today, not for tomorrow, but for the day after tomorrow. Maybe for days much later than tomorrow,” he says, and it would be too early to talk about fusion energy in his search for alternatives.
But one thing is certain, the energy crisis will not end anytime soon…
* Images of the news are taken from Associated Press and Haberturk.com.