Introduction: International Energy Agency (IEA) is calling “the first truly global energy crisis, with impacts that will be felt for years to come”.

HOW energy security impacted by Ukraine war:
1) Skyrocketing energy prices: The IEA says high fuel costs account for 90% of the rise in average costs for electricity generation worldwide. Coupled with global pandemic, 70 million who recently gained access to electricity can no longer afford it. And 100 million can no longer afford clean fuels, returning instead to biomass.

2) Changing trade flows and supply shortages: Russia cut gas flows to the EU by around 80% between May and October 2022, leaving the bloc with a significant shortfall in its energy mix, and a pressing need to find energy alternatives from other places.. However Russia increased its exports to India, Turkey and China, minimizing the impact of cuts in gas flows to EU.

3) Changing Energy Policies: In the wake of Russia’s energy cuts, several countries updated their energy policies. The US promulgated the Inflation Reduction Act, in August 2022,focusing on energy, tax incentives and climate programme. Similarly Peoples Republic of China promulgated the New Plan Renewable Energy Development, in June 2022, emphasizing just transition and setting higher targets for renewables.

4) Economic Impacts of Energy Crisis:: Higher feul prices are likely to lead rising prices of goods and services. Higher interest rates coupled with falling incomes in real terms are pushing the world towards a recession. A comparison of interest rates of 2022 with 2021 of some major economies suggest an average interest rate hike of 1.5-2 percentage points, further compounding the already bleak economic outlook.

5) How emission targets are being impacted: Some countries are accelerating their emission targets, other are increasing their use of coal, and some countries are doing both at the same time. However, it is estimated that 1-2% increase in emissions are projected in 2022 as compared to 2021,according to IEA.

6) A push towards to renewables: Having severed their energy ties with Russia, western countries have accelerated their push for ‘just transition’. Having a robust and diverse energy mix at the heart of energy security policies, the IEA says that the crisis could accelerate the move towards more sustainable fuels. However, short term policy choices undertaken by several countries have a real-time potential of slowing the momentum in the push towards renewables.

WHY Russia is important: 12.01% global energy market…

can be found that Russian and Ukraine contributes 12.09% to the global energy trade, while Russian accounted for 12.01%. Fig. 2 shown that the countries with highest imports percentage from Russian were mostly located in the Europe and Asia. It also indicates that they may more easily been influenced by RUW. Focusing on specific energy types, it can be found that Russian and Ukraine contributes 15.60% to the global coal trade, 11.34% to the global oil trade and 10.00% to the global gas.

Geopolitics attached to energy security::
KSA, UAE, and OPEC+.. Pledge to cut pumping of crude oil…

New Oportunuties:
1) India and China receiving oil and gas at discounted rates
2) Russia and China: Power of Siberia Gas Transmission System. Power of Siberia” — as the portion located in Russia is called — began delivering natural gas to northern China in December 2019. In China, the pipeline runs down the eastern side of the country, past the capital city of Beijing and down to Shanghai. The middle phase started operations in December 2020, and the final southern section is set to begin gas deliveries in 2025, state media said..
Gazprom and Chinese National Petroleum Corporation.
a) Irkutsk b) Yukotia gas fields..

HOW it minimizing the impact of gas cuts to Europe:
ANS: By volume, Gazprom’s gas exports to China via the pipeline rose by 63.4% to 7.5 billion cubic meters during the first half of the year, according to Russian news agency INTERFAX.

Recommendations:
1) Reaching at a consensus by all the parties concerned.
2) Focusing on furthering the agenda of green energy.
3) Consensus on curbing the factors notorious for uncertainty in the market.

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