Energy crisis fuels clean transition
Energy Outlook 2023
Global opinion largely agrees that we need to turn down the heat on the Earth’s thermostat. Yet despite this, actions on meeting global warming commitments have up until now been fairly slow to get going and often modest in scale.
However, this inertia is now beginning to change. The energy crisis with spiralling fuel prices and energy insecurity is accelerating the momentum for green transition, as governments and markets increasingly turn to renewables to underpin energy security and keep a lid on costs.
The latest research by Atradius economists looks in detail into the current energy crisis and how this impacts the wider outlook for the global markets in renewables, oil and gas.
Energy crisis shakes energy mix
Energy markets were already spinning due to the rapid rebound in demand following the pandemic, but then Russia invaded Ukraine. This triggered a huge energy supply shock, particularly for the European countries that had long relied on Russian gas. Now combined with other stress factors, including high inflation, we are facing a full-blown global energy crisis and a shake-up of the energy mix as markets start to look to alternative energy sources.
The short-term impact of the crisis is increased use of fossil fuels; the long-term impact is the opposite. Higher energy prices as well as the need for energy security are pushing countries, especially in Europe, to an acceleration towards renewables while reducing fossil fuels, especially gas.
Renewable energy outlook
The energy crisis is fuelling the use of renewables. Restrictions to supply following Russia’s invasion of Ukraine and the sharp increase in fuel prices have helped improve the competitiveness of wind and solar. Global renewables energy sector growth is further supported by net zero pledges and an increase in government actions to address climate change.
The US Inflation Reduction Act (2022) and the EU’s REPowerEU strategies are currently the most visible, actively using financial incentives as they aim to drive clean energy growth. China is leading the world in the volume and capacity of wind and solar energy production and will continue to do so for the next few years. However, decarbonising the energy sector will require huge investment, particularly in grids throughout the world as they scramble to accommodate growing demands for electrification.
Key figures
Renewables take charge
Climate pledges support strong growth in renewable energy. Investment in renewables will be required to meet growing global demand, while the appetite for fossil fuels declines over time.

Renewables (solar and wind) on par with hydropower in 2021
The percentage of global energy generated from combined solar and wind sources equalled that of hydroelectric power in 2021. Hydropower had previously been the largest renewable source, but this dipped in 2021 due to severe droughts in some of the countries where hydro is the main energy source.
Oil
Coal
Natural Gas
Renewables
Hydro
Nuclear
Oil market outlook
Oil demand is set to peak soon and steadily decline through the decades to come. The clean energy transition, supply uncertainties and geopolitical risks are all combining to deter consumption. The peak is already expected in 2024. This will be followed by demand side weakness ultimately leading to a decline in demand of about 40% between 2030 and 2050 and a fall in prices of between 20% and 60% over the same period.
The global decline in demand is concentrated in advanced economies, by policies targeting lowering demand such as the increasing electrification of cars. Asia-Pacific will remain the largest oil-consuming region, although this too is seeing a downward trend in demand.
Gas market outlook
Gas prices are currently high and subject to geopolitical volatility. This is particularly true for Europe which has been forced to rely on alternative sources to Russian gas, including turning to the use of the more expensive liquid natural gas.
Global demand for gas is facing a long-term decline. While expected to peak by the middle to second half of the decade, forecasts predict a decline of 8% by 2030 and a further 40% reduction by 2050. Although Russia is still expected to be the world’s largest gas supplier by 2050, its role will diminish in line with the global reduction in the use of gas.
Global demand for oil now peaking
As demand for electrification grows, the appetite for oil will reduce. The decline will be slower in emerging markets and developing economies, but overall the global demand for oil is reaching its peak around now.
Oil demand, million barrels per day (mb/d)
2010
2021
2030
2040
2050
Gas consumption facing decline
The world is turning off its preference for gas. Although the decline is is being driven by the overall push for clean energy, the current squeeze on supply is also a factor.
Gas consumption per region in billion cubic metres (bcm)
2030
2040
2050
Access Atradius economic research
Download the Atradius Energy Outlook for more detailed insight into the current energy crisis and the building momentum behind the clean energy transition. Learn how our economists developed two scenarios to explore the most likely developments within the energy markets and access their outlook for this period of global change.
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