Energy • The growth of renewables is still not enough to feed the insatiable energy appetite of the economic recovery

Breaking from the trend of 2020, 2021 and the first months of 2022 present a varied picture for energy production sector. Renewables, fossils and emissions are all on an upward trend. The energy crisis, which began in the second half of 2021, has been intensified by war in Ukraine, and the hike in energy prices in its wake has spared no actor. Europe, pursuing a target of long-term energy autonomy, is obliged to tackle the short term using coal, oil and LNG to secure supplies and move away from Russian gas. In parallel, Asia has turned to fossils – mainly coal – to fuel its recovery. This is the case for India, and to a certain extent China, which is still dealing with Covid-related lockdowns. In the private sector, differences between large and small actors are widening, while concentration and nationalization are intensifying.

• The energy crisis offers a reprieve for fossils as renewables continue to grow
• The revitalisation of fossil, which began before the war in Ukraine, and has been rendered even more criticial by the war
• Competition for LNG has also seen explosive growth
• This crisis has also affected the prices of renewable energy, due to overall inflation and supply chain issues
• It has brought to light the superprofits of the bigger actors, and the concentration of the market

Following an exceptional year in 2020, energy demand and electricity consumption picked up again in 2021, driven by the economic recovery. While renewable energy continued its galloping growth, it is fossil energy that has fed the appetite of demand, taking global energy-related emissions to higher levels than before the pandemic. Added to adverse weather conditions, these factors set the stage for a crisis that went on to be intensified by geopolitical tensions in 2022. Although the war in Ukraine has provided an additional motivation for the energy transition under a banner of energy independence, the current dependence on fossil fuels is a setback for greater ambitions.
The price of coal, oil and gas, all of which have risen since the second half of 2021, have had a number of consequences, in particular for Europe. Individual states have looked more closely at their energy mix, switching from gas imported by pipeline from Russia to LNG, while responding to concerns about superprofits and bankruptcies. On the private side, industry giants have benefitted from historically high prices, while small electricity companies have been forced into bankruptcy – leading to a concentration of the sector in the hands of the major players.