World energy markets will face more “turbulence” and price shocks this decade due to inadequate investments, the International Energy Agency said in a new report Wednesday.
Oil and gas spending is down in recent years in anticipation of less demand for fossil fuels as governments and private companies invest more in clean energy to address climate change.
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But clean energy spending and growth are far below what’s needed to keep pace with demand, the IEA said in its annual World Energy Outlook.
“We are not investing enough to meet future energy needs, and the uncertainties are setting the stage for a volatile period ahead,” said IEA Director Fatih Birol.
Birol said the way to address this mismatch is to boost clean energy spending considerably.
Without greater investment, volatile energy prices and shortages could become the norm.
Prices of natural gas, coal, and electricity have risen sharply in Europe, China, and the United States as the energy sector struggles to keep up with recovering demand following the economic downturn of the coronavirus pandemic.
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That has resulted in rolling blackouts in parts of the world, including China and India, and the shutdown of factories in other places, such as Britain.
