The “new normal”: Energy price volatility and climate framework uncertainty top concerns of global energy leaders
- World Energy Council report highlights the critical global and regional energy issues
- Middle East & North Africa leaders also concerned by renewables, coal and LNG
Abu Dhabi, 21 January 2015 – Energy leaders see energy price volatility and the future of a climate framework as their top critical uncertainties, according to the latest report by the World Energy Council.
These two issues also top the list of concerns of energy leaders from the Middle East and North Africa (MENA), according to the report. Compared with last year, they see the uncertainties around a future climate framework have increased, while concerns about price volatility have also risen.
The 7th annual World Energy Council report, “World Energy Issues Monitor – energy price volatility: the new normal”, is a barometer of the top issues set to shape the energy sector for the year ahead. This year the report has gathered the views of more than 1,000 energy leaders worldwide, including ministers and chief executives from nearly 80 countries.
For the MENA region, concerns about the future of coal and LNG have risen in terms of both uncertainty and impact. These resources, along with energy efficiency, illustrate the increased demand uncertainty for hydrocarbons in the region. Meanwhile, renewables continue to be regarded as an important energy source.
Launching the report today at the World Future Energy Summit, Marie-José Nadeau, Chair of the World Energy Council, says:
“Energy leaders in the Middle East and North Africa are concerned not only by the impact of climate change on their businesses but also the impact of energy production on their fragile environments. The region’s increasing uptake of renewables, as we see in countries such as the UAE, shows that alternative energy and conventional fossil fuels are not mutually exclusive. The Middle East is providing excellent examples of how innovation and resource diversification could help countries meet the challenge of the energy trilemma, namely the interplay between energy security, access to energy at an affordable price, and environmental sustainability.”
The World Energy Issues Monitor reveals that the uncertain impact of volatile energy and commodity prices has established itself as the number-one issue for energy leaders worldwide. Energy leaders are worried about the recent sharp plunge in the oil price to its five-year low. They are kept busy by the continual reduction in the cost of renewable energy technologies, which have increased their share in the energy mix, but have also put strains on the energy system. In some parts of the world that do not have viable energy storage solutions, the grid is not yet able to cope with large shares of intermittent forms of energy and lacks effective market signals to deliver back-up capacity or storage.
Climate framework is perceived as the next most critical uncertainty ahead of a global climate agreement being reached at the Conference of the Parties meeting (COP-21) in Paris at the end of this year. This issue – which could spell the presence or absence of a meaningful carbon price – has been a top critical uncertainty since the first World Energy Issues Monitor in 2009.
Energy leaders believe that the emissions agreement between China and the US, announced in November 2014, has increased the pressure on other large emitters whose stance and approach to cutting emissions still pose a large question mark for investors.
Christoph Frei, Secretary General of the World Energy Council, comments:
“High price volatility has become the new normal facing energy leaders. This is the context in which we expect them to take investment decisions at an unprecedented scale. The unprecedented uncertainty, the need to redefine infrastructure resilience in response to emerging risks, the expectation of changing market designs and evolving business models, as well as the changing geopolitical balance have all placed energy among the top strategic issues globally for at least the next decade. The importance of choosing smart policy options and innovation strategies has become greater than ever, and balancing the energy trilemma must be at the very centre of efforts of energy leaders.”
The 2015 survey underlines the way that geopolitical issues have gained importance for energy security, especially with the Russia–Ukraine conflict. However, as concerns about the effects of the global recession have alleviated since last year’s survey, energy leaders go into 2015 feeling more optimistic.
Download the 2015 World Energy Issues Monitor on: www.worldenergy.org/publications
The World Energy Council’s Chair, Marie-José Nadeau, will be presenting the report’s key findings at the World Future Energy Summit today (Wednesday, 21 January) at 11.30 am in a discussion on “Gas and Renewables: Partners or Adversaries?”.
Monique Tsang / firstname.lastname@example.org / +44 20 3214 0616
Notes to Editors
About the World Energy Council
The World Energy Council is the principal impartial network of leaders and practitioners promoting an affordable, stable and environmentally sensitive energy system for the greatest benefit of all.
Formed in 1923, the World Energy Council is the UN-accredited global energy body, representing the entire energy spectrum, with more than 3000 member organisations located in over 90 countries and drawn from governments, private and state corporations, academia, NGOs and energy-related stakeholders.
The Council informs global, regional and national energy strategies by hosting high-level events, publishing authoritative studies, and working through its extensive member network to facilitate the world’s energy policy dialogue.
www.worldenergy.org and @WECouncil
World Energy Issues Monitor
The World Energy Issues Monitor, now in its seventh year, provides an annual assessment of the issues impacting the global and regional energy sector based on the views of the World Energy Council’s energy leadership community. The maps identify the key uncertainties while highlighting the areas where action is most required to enable the sustainable supply and use of energy.
The 2015 report has gathered the views of more than 1000 energy leaders including Ministers and CEOs in 79 countries. It includes the assessment of six world regions and deep-dives carried out for 27 countries: Austria, Canada, Colombia, Estonia, France, Germany, Hungary, India, Indonesia, Italy, Japan, Latvia, Lebanon, Lithuania, Mexico, Namibia, New Zealand, Nigeria, Poland, Portugal, Romania, South Africa, Spain, Sri Lanka, Switzerland, Thailand, and the United Kingdom.
The report highlights 40 issues and their perceived impact, uncertainty, and urgency for global energy leaders and experts. The graphic illustrates these issues.