The forecast high oil and natural gas prices in the coming months, coupled with the ongoing Russia-Ukraine war, could elicit greater coal demand in some regions, the International Energy Agency (IEA) Executive Director Fatih Birol warned.
The prices of natural gas, coal and oil have all increased in tandem, causing global supply problems, Birol said.
Speaking to Anadolu Agency in Davos, Switzerland at the annual meeting of the World Economic Forum (WEF), Birol warned that “the world is currently going through the first global energy crisis. We have witnessed oil crises in the 1970s, but at that time the only fuel impacted was crude oil.”
However, now energy disruptions have arisen from the Russia-Ukraine war, resulting in increased energy prices and the unseating of Russia as the top oil exporter globally, the number one natural gas exporter and a major coal market player.
He envisages a continuation of high oil and gas prices and market volatility unless something unexpected happens.
To address the need for alternative energy sources to Russian hydrocarbons, some countries have already begun to source imports from elsewhere, with more natural gas imports from Azerbaijan, Norway and the US.
Renewables has also become strategically important, he said, also noting that countries that said goodbye to nuclear energy have put it back on their agenda.
- Panic in the air
The Russia Ukraine war has brought to the surface the need for more global green power efforts as a tool in breaking Western dependence on Russian sources.
He warned, nonetheless, with the general panic over rising energy prices and indicators of some countries pivoting towards coal, that climate change goals are at risk.
“Demand for coal may seriously increase. Some countries are panicking right now. Coal-related investments can affect our achievement of climate targets. So, we have to be careful,” he said.
He acknowledged that developing economies, Turkiye and India, are in a more difficult situation that countries in Europe, given that both are more dependent on energy.
“The main reason for price increases in Turkiye is the developments in the international markets. I do not think that an immediate solution can be found for these problems in Turkiye […] because Turkiye is not a country that impacts world energy trends,' he said.
Furthermore, he expects that energy prices in Turkiye will remain high similar to the rest of the world, but conceded that the steps the country has taken and will take for more renewables deployment and its first steps in nuclear power could reduce its dependence to some extent in order to increase economic resilience.
Reporting by Gokhan Kurtaran
Writing by Sibel Morrow