The deputy governor of the Bank of Spain, Margarita Delgado, believes that there will be energy ‘shocks’ in the short term and until there is enough renewable energy to supply the current lack of “cheap” energy in Europe.
In his speech at a conference organized in Barcelona by the Central Bank Research Association (CEBRA), Delgado made a distinction between the short term, in which there is a “shortage” of “cheap energy” in Europe, and the long term, when renewable energy will already be available.
“We are in a context of lack of energy, or cheaper energy, in Europe, and in the very short term we do not have enough renewables. But in the long run there will be a change, already underway, towards greener energies”, the deputy governor has affirmed.
Thus, Delgado considers that the pressures “will be reduced” as the energy transition progresses, but he does not rule out that other “shocks” may occur in the short term. The big question for Delgado is how to ‘balance’ the short and long term, as well as the impact of the ‘green’ transition on inflation.
To get a closer look at these issues, Delgado has highlighted the importance of knowing how companies are designing their sustainability plans, something equally key in the financial sector, as it is in charge of providing the necessary capital for the transformation of the economy.
Delgado has participated in the conference together with the economist from the San Francisco Federal Reserve, Fernanda Nechio, and the economist from Columbia University, Harrison Hong. Nechio has agreed with the distinction between short and long term established by Delgado and has described as “very unfortunate” that several ‘shocks’ occur at the same time, such as the war in Ukraine or the Covid-19 pandemic , which has destabilized supply chains and raised the prices of raw materials and energy.
However, Nechio has pointed out that climatic crises have continued and will continue to occur, with the impact on the economy that this entails. “It is very difficult to sort out the problems and prioritize some ‘shocks’ over others,” he maintained.
Source: Europa Press
