(EnergyAsia, February 8 2013, Friday) — Continued uncertainty in the future direction of climate frameworks, political instability in the Middle East and North Africa (MENA) region, energy price volatility, and the global economic recession are what energy leaders consider as the top “insomnia” issues driving the world energy agenda this year, according to the World Energy Council (WEC).
The issues were cited in the 2013 World Energy Issues Monitor launched by Pierre Gadonneix, WEC chairman, in New Delhi at the World Energy Leaders Summit.
He said: “With energy now topping the global agenda, our 2013 World Energy Issues Monitor clearly reveals that the critical issues identified by energy leaders are macroeconomic and geopolitical. Uncertainties surrounding climate framework reveal the strong desire of the energy sector to have clearer and more balanced governance. The survey also reveals the need to identify pragmatic, cost-effective, and technology-neutral policies.”
The study, which captures the view of the WEC energy leaders community, also reveals that carbon capture, utilisation and storage (CCS/CCUS) is the issue which has changed most radically over the past year. It has now moved down the energy sector’s priority list, according to the WEC.
Energy leaders believe that until there is clarity on the price of carbon, CCS/CCUS will continue to be seen as an additional cost on energy, especially given the current recessionary context. This is in marked contrast to previous surveys which identified CCS as a potential panacea.
The report’s author, Christoph Frei, the WEC secretary general, said:
“The most significant change is the way CCS is now being viewed with a clear tension between the desire of energy leaders for a climate framework and the lack of confidence in some mitigating technologies. This change in perception is of considerable concern as the success of new technologies like CCS will be critical if we are to achieve the massive transition required in the energy sector.”
Concerns arising from the current depressed economic outlook have overtaken nuclear energy as one of the top critical issues. While nuclear energy continues to be closely observed and debated, its perceived uncertainty and impact have dropped to pre-Fukushima levels. This reflects the prudent re-evaluation of nuclear energy in many countries
While unconventional fossil fuels including shale gas and unconventional oil are now considered long-term game changers, the WEC study finds that further action is required to realise their potential.
Renewable energy and energy efficiency are also areas needing further action as they can contribute to diversity and security of supply as well as enabling energy access to an estimated 1.3 billion “energy-deprived” people.
For India in particular, the critical uncertainties are volatile energy prices, climate framework, energy-water nexus, and the impact of a weak currency given India’s dependence on energy imports. Meanwhile, developing renewable energy and energy storage requires further action.
Dr Frei said: “Renewables and energy storage have huge potential in helping India increase energy access and enhance security of supply. But in order to do so, the sector must find the right innovations and the right investments to integrate those technologies into the Indian power system. The opportunities are huge, and having the right enabling policies are crucial to delivering those opportunities.”