Business leaders from 20 major economies believe the Ukrainian conflict is in favor of the energy transition. Rather than slowing the pace of the transition to cleaner energy, it would accelerate it. This is the conclusion of an investigation by the British law firm Ashurt.
Continued investment
The restrictions on Russian natural gas due to the Ukrainian conflict were a concern. Many thought that this would lead to increased demand for coal for heat and power generation. Such a situation could lead countries not to invest in wind and solar energy.
However, the Ashurt report indicates that the opposite is true. Indeed, the need for greater energy security highlighted by the crisis is likely to lead to a faster energy transition. Thus, it is not a question of slowing down the energy transition.
The survey reveals that more than 75% of the 1999 senior executives surveyed in the G20 countries expected the energy transition in their country to accelerate. 12% felt the opposite, expecting a slowdown. Companies and banks have been driving investment in renewable energy for several months.
An uncertain future
However, this trend is expected to change. Respondents expected funds, not companies, to be the primary new investors in renewable energy. These investments were to be spread over the next five years, particularly in the Asia-Pacific region.
However, Quinbrook, the infrastructure investor, predicts a slowdown in renewable energy investment in Australia over the next two years. Unpredictable energy prices threaten returns and equipment shortages delay project completion. David Scaysbrook, co-founder of Quinbrook says:
“So next year is going to be pretty lean in terms of investment numbers, despite all the core business that is authoring.”
Ashurt’s survey of senior executives involved in energy decision-making was conducted between June 22 and July 7, 2022. This was before the Inflation Reduction Act (IRA) was passed. This legislation provides billions of dollars in renewable energy tax credits to encourage companies to invest.
