Russia’s invasion of Ukraine has caused significant disruption to global energy markets. Europe has felt the biggest impact as a significant buyer of oil, and particularly gas, from Russia. In fact, Russia accounted for 35.5% of Europe’s gas supply in 2021. As the volume of gas coming from Russia has fallen, Europe has been scrambling to secure supplies on the wider global market. This has boosted the fortunes of liquid natural gas (LNG) suppliers such as Australia, Qatar, and the United States, all of whom have seen revenues increase substantially, which has boosted the business case for further investment in liquefaction terminals in these countries to increase exports. In Europe, countries have boosted investment in LNG regasification terminals, with demand for floating terminals, which can be brought online very fast.
Even before the invasion, investment in renewable energy was forecast to be high, but the invasion has led a number of countries to increase their spending. In fact, the European Union has mandated the acceleration of renewable energy. China and India have both increased their renewable investment programs. Southeast Asian countries that had plans to make gas a significant part of their energy mix are now reconsidering this strategy and focusing more on renewable energy. In the United States, passage of the Inflation Reduction Act, which is essentially a support package for renewable energy, will lead to significantly higher investment (this could well have occurred even if the invasion had not happened). These increases in renewable investment will also boost investment in grid technologies such as transformers, switchgear, and technologies that facilitate renewable energy coming online.
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