REPORT: A New World: The Geopolitics of the Energy Transformation

A 94 page report by the International Renewable Energy Agency (January 2019)

Excerpts from the IRENA report:

“This ongoing transition to renewables is not just a shift from one set of fuels to another. It involves a much deeper transformation of the world’s energy systems that will have major social, economic and political implications which go well beyond the energy sector.

The global energy transformation will have a particularly pronounced impact on geopolitics. It is one of the undercurrents of change that will help to redraw the geopolitical map of the 21st century. The new geopolitical reality that is taking shape will be fundamentally different from the conventional map of energy geopolitics that has been dominant for more than one hundred years.

The majority of countries can hope to increase their energy independence significantly, and fewer economies will be at risk from vulnerable energy supply lines and volatile prices. Some countries that are heavily dependent on exports of oil, gas or coal will need to adapt to avoid serious economic consequences. Many developing economies will have the possibility to leapfrog fossil fuelbased systems and centralized grids. Renewables will also be a powerful vehicle of democratization because they make it possible to decentralize the energy supply, empowering citizens, local communities, and cities.

“Global power structures and arrangements will change in many ways and the dynamics of relationships within states will also be transformed. Power will become more decentralized and diffused. The influence of some states, such as China, will grow because they have invested heavily in renewable technologies and built up their capacity to take advantage of the opportunities they create.

“By contrast, states that rely heavily on fossil fuel exports and do not adapt to the energy transition will face risks and lose influence.

The supply of energy will no longer be the domain of a small number of states, since the majority of countries will have the potential to achieve energy independence, enhancing their development and security as a result.

“The transition will generate considerable benefits and opportunities. It will strengthen the energy security and energy independence of most countries; promote prosperity and job creation; improve food and water security; and enhance sustainability and equity. Some states will be able to leapfrog technologies based on fossil fuels. The number of energy-related conflicts is likely to fall.

“Countries must prepare for the changes ahead and develop strategies to enhance the prospects of a smooth transition. At the same time, the energy transformation will generate new challenges. Fossil fuel-exporting countries may face instability if they do not reinvent themselves for a new energy age; a rapid shift away from fossil fuels could create a financial shock with significant consequences for the global economy; workers and communities who depend on fossil fuels may be hit adversely; and risks may emerge with regard to cybersecurity and new dependencies on certain minerals.

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