Outlook 2022: Fossil fuels still have generation role to play

Extreme price volatility as electricity systems adapt to greater intermittent renewable penetration serves as a reminder of the role legacy assets still have to play

We have experienced a year of great change and volatility in global energy markets, as the world has gradually recovered from the Covid-19 pandemic. Power generation from renewable sources took on greater importance as countries looked to meet their net zero requirements, coal plants were phased out and many countries relied on gas-fired generation as a transitional resource when the wind did not blow or the sun did not shine. Soaring gas prices—due mainly to reduced supplies and higher demand as the world came out of the pandemic—regularly put electricity systems under pressure. The wholesale price of gas in December 2021 was approximately five times that of December 2020. Are these trends