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The green transition has been turbocharged by wars and subsidies
Russia's invasion of Ukraine wreaked havoc on energy markets, but there are silver linings, such as an accelerated transition to green energy! Prices for fossil fuels are rising, but so is funding for renewables. Although coal is making a comeback, renewables have the strategic advantage..
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All About It
A deserted German village known as Lutzerath represents the nightmare of the global energy crisis for many activists. After Robert Habeck, the country's energy minister, allowed a utility company to mine for lignite—the dirtiest type of coal—below the graffitied homes, campaigners prevented the location from being demolished for months. Unaffected by the pyrotechnics aimed at them, a large number of police dragged protesters from their stations as a large excavator got closer. The village is now deserted; The last buildings are gone.
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Policymakers in Europe and Asia are reopening coal mines, keeping polluting energy plants alive, and signing deals to import liquefied pure gasoline (lng) in a panic to keep the lights on. State-owned oil giants like the United Arab Emirates' Adnoc and Saudi Aramco are saving a lot of "dollars" to boost output, while private energy companies are making a lot of money.
To help residents get through the winter, numerous governments are subsidizing energy use to encourage the consumption of these polluted fuels.
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The return of brown fuels, on the other hand, is merely a subplot within a much larger narrative. Russia's invasion of Ukraine has given renewable energy, which is typically produced domestically, a significant strategic and financial advantage by making coal, gasoline, and oil scarcer and more expensive—costs remain well above long-run averages despite current falls. Indeed, when Mr. Habeck supported coal mining last year, the Green politician proposed expanding photovoltaic and wind power, particularly in Lutzerath's blustery Rhineland. In order to finance a build-out, officials around the world are raising renewable energy targets and allocating substantial funds.
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It is difficult to determine whether the turmoil in the energy markets has helped or hindered the energy transition because of this complexity. The Economist has examined a variety of factors, including the utilization of renewable energy sources, energy efficiency, and the consumption of fossil fuels, in order to evaluate the overall picture.
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According to our findings, the crisis brought on by the conflict in Ukraine may actually have sped up the natural transition by an astonishing five to ten years.