Global fuel Shortage is Unlikely to Delay the Transition to Clean Energy.

Bank of Singapore says global hydrocarbon-based fuel supply shortage will not disturb international efforts to mitigate climate change and achieve net zero carbon emissions by the middle of the century.

Due to natural gas and coal shortages in certain regions of Europe and Asia, energy prices have risen to levels not seen in more than a year.

Due to natural gas and coal shortages in certain regions of Europe and Asia, energy prices have risen to levels not seen in more than a year. There are fears that higher prices will lead to increased investment in hydrocarbons, which could threaten efforts to wean the global economy off fossil fuels 

As a consequence of these shortages, oil prices have risen to levels not seen in three or seven years.

The Bank of Singapore, on the other hand, believes that after the recent shortages, efforts to switch to clean energy will speed up.

“Our view is that the disruptions will not derail the energy transition. The pain inflicted by the current energy crisis may spur policy changes that encourage an even more rapid transition to clean energy over the next decade,” the Bank of Singapore said in a report.

At 2.08pm UAE time, Brent crude, the global body for crude, was trading at $85.63 per barrel, down 0.42 percent. The price of West Texas Intermediate’s crude, in the US, fell by 0.54 percent to $83.31 per barrel. With Henry Hub prices up 0.64 percent to $5.936 per million BTUs at 2.10pm UAE time, natural gas prices have also doubled so far this year.

Although signs of additional oil supply entering the market are there, the movement towards clean energy, which is supported by global policy initiatives such as Cop26, is expected to continue.

“Notwithstanding emergency measures taken to ease energy shortages in China and Europe, we expect to see a progressive shift away from new investment in fossil fuels and a significant increase in investment in renewable energy sources,” the Bank of Singapore said.

The report says, falling wind and solar energy prices may encourage even more investment in renewables. According to BloombergNEF, wind and solar are already among the cheapest sources of energy and will account for the majority of electricity generation in countries that account for two-thirds of the world’s population and three-quarters of global GDP. According to the International Energy Agency, 70% of the $530 billion spent on increasing generating capacity will be clean energy.

“The energy transition over the coming decade is likely to be highly non-linear,” said the bank.