energy security

The norm since the end of the civil war in Lebanon in 1990 has been for the population to pay two bills for a day’s worth of electricity: one to Électricité du Liban (EDL) — a public utility provider — and the other to the private generator of each neighborhood. Master plans were drafted yet never executed, much like the promised reforms of the electricity sector, which never materialized. Today, Lebanon faces multiple crises and is in free fall. Amidst the meltdown, the energy sector has been the most affected, with hour-long blackouts.

As Asia was divided in its condemnation of the Russian invasion of Ukraine, the rise of the price of commodities is having an uneven impact over the region.

The more advanced economies are facing challenges similar to those that Europe is experiencing, where inflation and energy demands are the primary concerns.

In contrast, emerging markets are more concerned for their national food security.

The increase of the world’s electricity need is approaching a quick surge due to the spread of mobility electrification, the increase in the global population, and the growing use of air conditioning and electronic systems.

COVID-19 containment measures and 2020 low oil prices exposed the vulnerability of MENA petroleum producing economies to external shocks. The heavy reliance on oil exports means that volatility in oil prices has significant impact on the economy. In times of sinking oil demand, this translates into fiscal deterioration and public expenditures cuts.

The severe power outages that plagued China since September 2021 have highlighted the clash between efforts to limit environmental degradation and short-term economic realities. Lower supplies of coal—due to tighter environmental and safety inspections—combined with soaring power demand on the back of an infrastructure-heavy economic recovery, led to severe power cuts in over 20 Chinese provinces. The power rationing has weighed on the country’s economic growth and impacted global supply chains.

Worldwide, energy prices recently skyrocketed to their absolute highest level in decades, spreading concerns about their ripple effect for consumers, the economic recovery, and energy security.

Europe is at the centre of an economic and geopolitical storm. Since last September, the prices of electricity and natural gas have steadily increased. EU natural gas prices soared to a new record high of €180 per megawatt-hour on the 21st of December, underpinned by a double-whammy of cold weather forecasts in late December and fears of supply disruptions. If compared to an average of €20 per megawatt-hour in mid-June, the December figures represent a 900% increase.

Contemporary energy dynamics suggest we are heading towards years of likely price volatility, with a strong necessity for governmental support schemes to channel the investments required to achieve the green transition. The final destination of this journey, as well as the travelling speed, will ultimately depend on available resources, technology, and consensus. This consensus, in turn, relies on the capability to distribute in a non-regressive way the costs of the transition.

Occorre aumentare gli investimenti per la transizione verso energie green. Gli alti prezzi delle fonti fossili dimostrano che non c'è tempo da perdere.

2021 approaches; Europe is filled with hope. Vaccines and medicines will help us fight our way out of the pandemic. Unprecedented rescue and recovery packages serve to soften the painful impacts of the Covid-19 crisis and the related lockdowns. After a very tough 2020 with all of its losses and set-backs, relief is in sight. 

How will energy-climate scenarios evolve in times of pandemic? In a positive direction, one could argue, if one considers the clear skies, breathable air, cars missing from streets, declining energy consumption, and a significant drop in climate-altering emissions. But this perspective does not hold.