Energy outlook 2022
With the loosening of COVID-19 restrictions in recent months, the world was thought to be arriving in a position where it could further accelerate away from its reliance on fossil fuels. Then, in late February 2022, the war in Ukraine began and this will also impact the transition from carbon-derived fuels to more sustainable and renewable energy sources.
Complex world of energy supply and demand
The supply of oil and gas has always been a geopolitical issue stretching back a century and to the period that saw the onset of the First World War. Now people across Europe have suddenly found themselves more involved than ever in the complex world of energy supply and demand. And while previous wars in the Middle East have impacted Europe and created higher prices at the fuel pumps, nothing is comparable with the current situation.
To that end, the renewable energy policy directed from Brussels will now likely be both significantly stronger and more frequently articulated.
Onshore and offshore wind power
It is thought that onshore and offshore wind power will receive a greater boost than seen before. Likewise, solar energy both for heat and electricity (PV) will also be more strongly supported, although this development in southern Europe, in particular, has been active since the beginning of the millennium.
It is increasingly clear that sourcing natural gas from Russia is no longer considered to be a viable geopolitical option for Europe, and that this gas may ultimately be substituted by hydrogen throughout the European pipe network. Furthermore, it is thought that the new European collaboration against President Putin will likely both speed up the technological shift towards renewables as well as the amount of euros invested, in terms of enhancing the European security of energy supply.
European countries who have been particularly reliant on natural gas from Russia are expected to begin a rapid technological transition towards new energy sources.
Norway is key to this transition in many ways, since it is the third largest exporter of natural gas in the world, after Russia and Qatar. It is therefore likely that the demand for Norwegian gas will now be significantly higher and in the short run new investments to help secure this gas supply are to be expected.
But Norway also possesses the engineering know-how to help further expand the offshore wind market, based on their long experience of the offshore exploration of oil and gas. In addition, it is now possible that there will be a transition in the North Sea from oil rigs to offshore wind farms, with many new engineering companies becoming involved in the shift to the new business.
New know-how will be needed
Furthermore, new know-how will be needed for offshore wind farms potentially being installed at sea depths never attempted before. General offshore safety knowledge and the practices long utilised in the oil industry will likely therefore be transferred to offshore wind. The expectation is that the Norwegian cities of Oslo and Bergen are likely to become hot spots for politicians and venture capitalists who wish to become part of this energy transition.