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Global Energy Crisis — The First of Many in a Clean-Power Era

Global Energy Crisis — The First of Many in a Clean-Power Era

The world is living through the first major energy crisis of the clean-power transition. It won’t be the last.

The shortages jolting natural gas and electricity markets from the U.K. to China are unfolding just as demand roars back from the pandemic. But the planet has faced volatile energy markets and supply squeezes for decades. What’s different now is that the richest economies are also undergoing one of the most ambitious overhauls of their power systems since the dawn of the electric age — with no easy way to store the energy generated from renewable sources.

The transition to cleaner energy is designed to make those systems more resilient, not less. But the actual switch will take decades, during which the world will still rely on fossil fuels even as major producers are now drastically shifting their output strategies. 

U.K. Power Mix

Renewables now supply more than one third of U.K. electricity generation

Ofgem, BEIS

“It is a cautionary message about how complex the energy transition is going to be,” said Daniel Yergin, one of the world’s foremost energy analysts and author of The New Map: Energy, Climate and the Clash of Nations.

In the throes of fundamental change, the world’s energy system has become strikingly more fragile and easier to shock.

Recipe for Volatility 

Take the turmoil in Europe. After a colder-than-normal winter depleted natural gas inventories, gas and electricity prices soared as demand from rebounding economies surged too fast for supplies to match. Something similar probably would have happened had Covid-19 struck 20 years ago.

See Also Crisis Is ‘Revenge of Old Economy,’ Goldman Sachs SaysWATCH: Goldman Sachs’s Jeff Currie calls the energy crisis a “revenge of the old economy.”


By David R BakerStephen StapczynskiDan Murtaugh, and Rachel Morison


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