New report highlights critical issues for global energy sector
For the first time energy price volatility and recession have replaced climate framework uncertainty as dominant concern among world energy leaders
GLOBE-Net, February 18, 2014 – High energy price volatility has for the first time replaced global climate framework as the number-one critical uncertainty driving the world energy agenda, according to the 2014 World Energy Issues Monitor, released today by the World Energy Council (WEC).
Global climate framework uncertainty, while still is a key uncertainty, is now perceived by energy leaders to have less impact than in the previous three years of the study. Meanwhile, carbon capture, utilization and storage (CCUS) continues to be viewed as a technology with only a limited impact on the energy sector, continuing the clear trend over the past three years.
Christoph Frei, WEC Secretary General, noted “The fact that both climate framework and CCUS are perceived to be issues of less impact is bad news not only in terms of emissions mitigation, but also for the development of robust and resilient energy infrastructure. Our energy systems are in a state of massive expansion and transition, and the signals we see today provide clear evidence of the urgent need for more robust, coherent, long-term frameworks within which to plan and implement future investment.”
Energy price volatility goes beyond merely oil and gas prices and their regional differentials. It is also being influenced by the coal-to-gas substitution in the US; the increasing use of coal in Europe, which has driven up emissions; the collapse of solar module prices; and Australia re-directing its interest from North America to Asia while North American infrastructure companies are signing more deals with Asian customers.
The WEC study further finds that energy leaders are increasingly concerned about the sector’s ability to access the capital markets for funds towards energy infrastructure, when set against a continued recessionary backdrop.
Meanwhile, renewable energy and energy efficiency continue to keep energy leaders busy, with growth shifting from Europe and North America to the Middle East where demand is rapidly rising. Large hydropower is back on the agenda with significant unrealised potential in central Africa, Latin America, Russia, and Canada.
The 2014 World Energy Issues Monitor is the culmination of a six-month study capturing the views of over 800 energy leaders including ministers, chief executives and the heads of the WEC’s national members committees covering 84 countries. The report, which highlights strong regional variations, looks at the global energy agenda and analyses the trends and outlook in six world regions plus 24 countries.
In Africa, the top critical uncertainties are climate framework, high energy prices, and commodity prices. As a change from last year, national governments and regional institutions are taking actions in energy efficiency and regional interconnection, while investment cooperation with China and India is viewed with increasing importance.
The study finds that in addition to energy prices, the top regional critical uncertainties are:
- Africa: climate framework, commodity prices
- Asia: renewable energy
- Europe: global recession
- Latin America & Caribbean: commodity prices, capital markets
- Middle East & North Africa: energy efficiency, renewable energy
- North America: nuclear energy, capital markets
Marie-José Nadeau, Chair of WEC, commented “This analysis shows us that the energy sector is reacting to short-term price signals while long-term signals are still absent. As the gap between energy access, energy security and energy sustainability widens, the financial investments and technical efforts required to deliver simultaneously secure, affordable and environmentally sustainable energy will increase significantly. The World Energy Council therefore urges the energy community to work on long-term frameworks, as they are key to our ability to reach our goals.”
Marie-José Nadeau will be a featured speaker at a special session at GLOBE 2014 on The Global Energy Mix: Opportunities and Realities . She will be joined by Jules Kortenhorst, CEO, Rocky Mountain Institute, Ken Lueers, President, ConocoPhillips Canada, Jacques Besnainou, Director, General Fusion Inc. & Former President & CEO, AREVA Inc., and Al Monaco, President & CEO, Enbridge Inc.
Download the 2014 World Energy Issues Monitor on: www.worldenergy.org/publications