The European Union is facing a global energy crisis exacerbated by inflation, geopolitical dilemmas and the climate imperative. Based on this premise, the report ‘The World Energy Outlook 2023’ by the International Energy Agency (IEA), published on 24 October 2023, stresses the urgent need to diversify energy sources and move towards a green transition.
By 2022, Europe imported 90% of its oil, 75% of its natural gas and 42% of its coal, demonstrating a risky dependence on fossil fuels, according to data from the IEA.
The escalation of the unrest in Ukraine accentuates the need for an accelerated transition. With global demand for fossil fuels expected to peak before 2030, the EU is firmly committed to sustainability, as the document points out. By 2022, investment in solar photovoltaics had increased by 23%, and sales of electric cars accounted for 15% of total new car sales. Nevertheless, the IEA believes that particular attention needs to be paid to supply chains, particularly for wind power, which is currently under strain.
The challenge is twofold: the EU is aiming for a 55% reduction in emissions by 2030, while at the same time tackling energy poverty. The investment in heat pumps and the 12% reduction in gas boiler installations in 2022 illustrate this commitment. At the same time, the global energy dynamic, in particular China’s economic slowdown, could offer a breathing space, with downward pressure on fuel prices, but with possible geopolitical volatility.
Furthermore, as the IEA points out, the arrival of a wave of new LNG projects from 2025 onwards will reshape gas markets. The EU should therefore prepare for a possible glut of LNG on the market, which could reduce prices but also limit the opportunities for further diversification of supply sources. Europe’s energy security depends not only on access to energy, but also on the diversity and resilience of its sources of supply.
The report: https://aeur.eu/f/98h (Original version in French by Nithya Paquiry)