The energy transformation will reshape the geopolitical map
Political and business leaders from around the world outlined the far-reaching geopolitical implications of the energy transformation driven by the rapid growth of renewable energy. “The changes can be as significant as those which have arisen as a result of transition from biomass to fossil-fuels have done over the last 200 years,” say the authors of the report "A New World", the Global Commission on the Geopolitics of Energy Transformation experts.
The document presented at the last Assembly of the International Renewable Energy Agency (IRENA) states an indisputable fact – the energy transformation will not only contribute to the emergence of new leaders and players in the field of energy, change trade relations between states, but also change the position of countries in the international arena. Adnan Amin, member of the Global Energy Prize International Award Committee, Director-General of the International Renewable Energy Agency (IRENA) says: “The benefits of the energy transformation will outweigh the challenges, but only if the right policies and strategies are in place. It is imperative for leaders and policy makers to anticipate these changes, and be able to manage and navigate the new geopolitical environment.” The global fossil-fuel exporting countries influence may face instability if they don`t adapt their economies to the realities of a new energy age. The authors of the report are convinced that a sharp transition from traditional sources of energy can create a situation of financial shock with significant consequences for the world economy. However, countries that are heavily dependent on fossil fuel imports can significantly improve their trade balance, reduce the risks associated with vulnerable energy supply lines and volatile fuel prices by increasing the share of renewable energy produced domestically. It will also increase access to energy, create new work positions, and improve food and water security.
The Commission notes that, unlike fossil energy sources, renewable energy is available in some form in most regions of the world. This fact will strengthen the energy security of individual countries and contribute to the energy independence of many states. At the same time, during a course of the renewable sources development and the energy systems integration of neighboring countries growth, there will be new interdependent trade relations. Conflicts over natural resources such as oil and gas can diminish as the importance of some chokepoints (e.g. water channels on the way of well- known oil routes).
In addition, large investments in “green energy” will also strengthen the influence of some countries. For example, China will strengthen its geopolitical position by leading the race for “clean energy” and become the world's largest producer, exporter and installer of solar panels, wind turbines, batteries and electric vehicles.
As for the process of energy transformation in Russia, the authors of the report are convinced that our country, as the largest gas exporter in the world and the second largest exporter of oil, may face difficulties in adapting to new energy trends. Despite the fact that the Russian economy can be called diverse, income from oil and gas production remains one of the most important sources of replenishment of the state budget, accounting for about 40% of budget revenues. Although Russia invests in research and development of renewable energy sources, the country still lags far behind China and the United States in terms of patenting renewable energy technologies.
The importance of increasing the RES share in the energy balance for the sustainable development of the national economy is not in doubt. “In order to keep up with global energy trends, Russia needs to introduce the world's leading approaches to the industry, including the terms of increasing the share of renewable energy,- says Sergey Alekseenko, the 2018 Global Energy Prize laureate, RAS Academician. - While the planned contribution of RES to the Russian energy sector by 2020 will be, unfortunately, only 1%.”
In general, the authors of the report agree that the transition to cleaner energy sources is not only in the interests of states’ national development, but also reflects the trends that affect the geopolitical balance of power in the world.
The Global Commission on the Geopolitics of the Energy Transformation was established as an independent initiative by the International Renewable Energy Agency (IRENA) in order to raise awareness and deepen understanding of the geopolitical implications of the energy transformation driven by renewables. The Commission is supported by the governments of Germany, Norway and the United Arab Emirates. It consists of experienced leaders from the worlds of energy, politics, trade, environment and development.