The International Energy Agency (IEA) was founded after the oil price shock of 1973, marking a recognition of the need for a multilateral response to the crisis. More than 50 years on, recent events, including Russia’s invasion of Ukraine, have demonstrated once again that energy security and national security are inextricably linked—and that lasting energy security comes from countries working together.
Over the next couple of days in London, the UK government and the IEA will bring together more than 55 governments and some 50 businesses from around the world to discuss how we can work together in this new era. There are many challenges and opportunities today, including the rise of clean energy technologies as an increasingly important part of energy systems across the globe.
As circumstances change, countries need to take a fresh look at what it means to have secure energy systems.
Last year, oil’s share of the global energy mix fell below 30 per cent for the first time, way down from the mid-1970s when its share was close to 50 per cent. Major changes are taking place across energy systems, with technologies such as solar, wind and EVs growing rapidly, alongside a renaissance of nuclear power.
Indeed, according to IEA data, over 80 per cent of the increase in global electricity generation last year was provided by renewables and nuclear power – and around $2 trillion was invested in clean energy worldwide. Meanwhile, the world is entering a new age of electricity, with electricity use growing twice as fast as overall energy demand over the last decade and set to expand even further in the coming years.
Oil and gas will continue to play an important role in the global energy system for years to come, but for the UK and many other countries, investing in clean energy is now not just a climate imperative but an urgent national security imperative – and a way to make energy more affordable for households and businesses.
Russia’s use of its gas supplies to undermine the economies of European countries has caused massive energy price spikes that ruined family finances, business finances and public finances. This energy crisis has underscored for the UK and other countries the urgency of quickly reducing exposure to this key vulnerability.
Indeed, a key reason why the take-up of clean technologies has risen so dramatically is because costs are coming down so fast – by 90 per cent in the last decade for solar, by over 75 per cent for batteries, and 60 per cent for wind. That happened because of initial government support across multiple countries so that now, unsubsidised, these technologies represent the cheapest electricity sources for the vast majority of countries worldwide. Solar is providing the lowest-cost electricity in history.
The next frontier is other technologies that will be crucial in a low-carbon future. Small modular nuclear reactors represent a huge opportunity for Britain and indeed the world, alongside other industries of the future such as carbon capture and hydrogen.
As we develop this energy system of the future, we can also learn from each other on a whole host of other issues—including managing our grids, and building the transmission infrastructure we need.
We need to tackle the new energy security challenges that are emerging, including around the supply chains for clean energy technologies and the critical minerals that are used to make them.
At the same time, as we make this clean energy transition, there is a crucial role for co-operation on oil and gas across countries, so no country or region is exposed as Europe was before Russia’s invasion of Ukraine.
It is important to emphasise that countries taking part in this summit will follow their own specific national path. Some will differ on the role of low-carbon energy sources and fossil fuels in their energy mix. It is important to respect and understand national differences.
But despite all the challenges, those gathered at the summit are united by having a huge opportunity. The world is developing and deploying new energy technologies at speed and at scale – and driving down their costs in an unprecedented way.
There is a vision of energy abundance, across developed and developing countries that can raise living standards, deliver energy security and do the right thing for future generations. At a time when so much of what is happening in the world looks so intractable, we will carry that spirit of optimism into our deliberations at the summit.
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