The Executive Director of the International Energy Agency (IEA), Fatih Birol, highlighted that the energy transition is necessary not only to mitigate the effects of climate change but also to provide immediate economic benefits and contribute to future energy security.
"We need to consider today's realities but also what is to come," Birol stated during a roundtable at the Davos Forum, which discussed Donald Trump's new energy policies, including his withdrawal from the Paris Agreement on climate change and his push for increased oil production in the United States.
Birol, representing the IEA, which includes most developed countries, including the U.S., noted that while there are many "economic and political uncertainties" today, attention must also be paid to "certain certainties," such as the reality of climate change and the challenges of energy security now and in the future.
He emphasized that the key to energy security lies in "diversification" through different technologies, export and import options, and various supply sources. He recalled the delicate situation Europe faced during the 2022-2023 crisis due to its heavy reliance on Russian gas.
Birol explained that renewables contribute to diversification, with storage technologies enhancing efficiency, noting that last year, battery prices dropped by 20%.
He pointed out that solar energy is now the cheapest way to generate electricity in most parts of the world, particularly in Africa. However, despite favorable natural conditions, solar energy production across the continent last year was less than that of the Netherlands, which is "very unfair from a humanitarian perspective."
Birol stressed that the energy transition is making energy systems "more secure and predictable," leading to lower prices and reduced dependencies.
"The energy transition not only reduces emissions but also brings prosperity and decreases dependencies," he reiterated, emphasizing that the energy transition and energy security must go hand in hand.
He also emphasized that the energy transition "means different things in different parts of the world," and each country must adopt a tailored approach. He warned that those who ignore this reality are losing economically and are not preparing their economies for the future.
"We must be pragmatic, not dogmatic," he stated, referring to what he called the "historic mistake" Germany made by prematurely shutting down its nuclear plants without adequate alternatives: "That did not contribute to a healthy transition."
During the same roundtable, the CEO of the Indonesian oil company Petronas, Muyhammad Taufik, provided a counterpoint to the debate on the Paris Agreement, suggesting that the past decade has seen "a collision between idealism and economic realities."
Taufik argued that governments and corporate leaders must respond to public demands, especially in Asia, which is experiencing economic dynamism. This means continuing activities with oil and gas.
He acknowledged that oil and gas exploitation must adapt to climate change, but "the reality" is that in Asia, 85% of energy consumption is met by fossil fuels.
Portugal's Minister of Energy and Environment, Maria de Graça Carvalho, explained that renewable energy's share in electricity generation in her country rose to 71% in 2024. They aim to reach 95% by 2030, positioning the energy transition as a "competitiveness factor" and a key to attracting investment.
Graça de Carvalho also highlighted the importance of "our internal market with Spain (in energy)" considering the challenges of interconnections between the Iberian Peninsula and France.
