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Last year saw global energy demand increase at its fastest rate since 2010, according to a research note from analysts at UBS Monday.
The note said that although there was a “growing desire” to transition away from fossil fuels, “demand for most energy resources, including fossil fuels” would continue to rise. It added that while renewable fuel supplies were set to increase at a fast pace, diversification from non-renewable resources would be expensive and time consuming,
“Despite growing aspirations to diversify away from fossil fuels, we think demand for most energy resources, including oil, coal, and natural gas, is likely to keep rising over the coming decade,” the UBS analysts said in the research.
“We believe supplies of renewable energy will keep rising at an unprecedented pace over the next few decades. But diversification of our current energy resource base away from non-renewable energy resources such as oil, coal, and natural gas on a meaningful scale will be costly and time consuming. We expect the transition to occur only gradually.”
However, the research team added that the development of renewable energy was “essential” and a “necessary step in securing our energy future.” The environmental benefits of renewable sources of energy were cited as the “key motivator” for the development of renewables in the near term.
The note said that diversification would be needed to “mitigate the risk of instability in energy availability and pricing.” This would be especially pertinent in times of supply or demand shocks in the oil and gas markets, it added.
The renewable energy sector employed 11 million people in 2018, according to a recent report from the International Renewable Energy Association (IRENA). Most renewable energy jobs were in the solar photovoltaic industry, which employed 3.6 million people, according to IRENA.