2013 World Energy Issues Monitor Report Feb2013

For sustainable energy.
2013 World Energy Issues Monitor

World Energy Council

Officers of the World Energy Council
Pierre Gadonneix Chair Abubakar Sambo Vice Chair, Africa Liu, Tienan Vice Chair, Asia Arup Roy Choudhury Vice Chair, Asia Pacific/South Asia Younghoon David Kim Acting Chair, 2013 Congress, Daegu Leonhard Birnbaum Vice Chair, Europe Jos Antonio Vargas Lleras Vice Chair, Latin America/Caribbean Taha M. Zatari Vice Chair, Special Responsibility for Middle East & Gulf States Kevin Meyers Vice Chair, North America Marie-Jos Nadeau Chair, Communications & Outreach Committee Graham Ward, CBE Chair, Finance Jos da Costa Carvalho Neto Chair, Programme Committee Brian Statham Chair, Studies Committee Christoph Frei Secretary General 2013 World Energy Issues Monitor World Energy Council Copyright 2013 World Energy Council All rights reserved. All or part of this publication may be used or reproduced as long as the following citation is included on each copy or transmission: Used by permission of the World Energy Council, London, www.worldenergy.org Published 2013 by: World Energy Council Regency House, 14 Warwick Street London W1B 5LT, United Kingdom ISBN: 978 0 946121 20 5
Contents
Contents 1. 2. Introduction Assessing the Global Energy Agenda Analysis by Christoph Frei, PhD, Secretary General, World Energy Council Assessing the Regional Energy Agenda Analysis of WECs Six Regions for Issues Maps 3.1 3.2 3.3 3.4 3.4 3.6 4. Africas Critical Agenda Asias Critical Agenda Europes Critical Agenda Latin America and the Caribbeans Critical Agenda Middle East and North Africas Critical Agenda North Americas Critical Agenda
1 2 5
3.
9 9 11 13 15 17 19 22 22 23 24 25 26 27 29 31 33
Assessing Countries Energy Agenda Analysis of six selected countries 4.1 4.2 4.3 4.4 4.5 4.6 Colombias Critical Agenda Germanys Critical Agenda Indias Critical Agenda Indonesias Critical Agenda South Africas Critical Agenda Switzerlands Critical Agenda
5.
Assessing the Global Agenda Feedback from our Future Energy Leaders (FELs)
Project Participation
2013 World Energy Issues Monitor World Energy Council
1 Introduction
Introduction
Even with improvements in energy efficiency we expect global energy demand to double by 2050. This is the inevitable consequence of global population growth, global economic growth, continued urbanisation, as well as the resulting increased demand on mobility and other energy dependent services. During the same period we will need to reduce global greenhouse gas emissions by half if we want to keep a global temperature increase below two degrees Celsius. And, there are still 1.3 billion people without access to electricity. What seemed unimaginable two decades ago has become reality: energy is again on the top of the political agenda in many countries such as Japan, Russia and Germany, now becoming a priority for prime ministers and presidents. The post Fukushima nuclear future, the game changing shale gas, supply uncertainty and price volatility related to the Arab Decade, the shift of demand to East, tumbling solar cell prices and related trade disputes between Europe and China or the US and China, climate framework uncertainty, and global recession are rocking the foundation of what many believed two decades ago to be a steady roadmap into our energy future.
The global energy sector will need to invest half of current world GDP over the next two decades in order to address these challenges and expand, transform and adapt the energy infrastructure. In the absence of global agreements and regulations on energy or climate policy that would guide such a transition, the main policy decisions remain in the hands of national and sub-national policy makers. The World Energy Council supports policymakers around the world in their efforts to develop adequate energy policy frameworks capable of attracting the needed investments and balancing between the conflicting objectives. By developing our World Energy Trilemma framework, supported by our annual Energy Sustainability Index, we are able to provide a coherent framework to help address the challenges of what we call the World Energy Trilemma. The World Energy Councils definition of energy sustainability is based on three core dimensions - energy security, social equity, and environmental impact mitigation. We translate the Energy Trilemma to national contexts and benchmark progress towards the Trilemma objectives over time to enable policymakers to deliver a sustainable energy system for the greatest benefit of all.
Decision makers face a multitude of choices and possible actions, some of which will succeed through sheer market forces while others require coordination between market signals and policy frameworks. The breakthrough of shale gas in the US exemplifies the market forces driver and the slow progress of energy efficiency measures, in a context where energy prices are subsidised, illustrates the potential role of policy drivers, or what can happen when the signals are not strong enough. We can only advance a meaningful dialogue among the Global Energy Leaders Community if we focus on a set of clearly identified priorities. WECs World Energy Issues Monitor provides a snapshot on what keeps Energy Ministers, CEOs and leading experts in over 90 countries awake at night and therefore defines the World Energy Agenda and its evolution over time.
Figure 1 Figure Issues Monitor: highlighting most rapidly moving Global Map 1 WECs 2013 World Energy World Energy Issues Monitor
issues (CCS, nuclear, unconventionals) and most robust action issues Global, 2012
World Energy Issues Monitor Global, 2012
climate framework
critical uncertainties
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Middle East dynamics ccs electric storage vehicles terrorism currency uncertainty electric commodity prices
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large scale accidents Middle East
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regional energy dynamics nuclear innovativeinterconnection subsidies regulation ccs renewable trade barriers smart biofuels EU cohesion energies sustainable grids capital business electric cities markets US policy cycle commodity storage energy water large scale unconventionals nexus hydro prices large Brazil
Global China India
recession
energy energy efficiency prices
hydrogen economy
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weak signals
Brazil
need for regional energy China India action nuclear innovativeinterconnection subsidies regulation corruption renewable trade barriers smart biofuels EU cohesion energies sustainable grids capital business cities energy markets US policy cycle energy water efficiency large scale macro geopolitics business vision & impact nexus hydro economic & regional environment technology Russia energy need for energy affordability poverty
vehicles terrorism poverty currency uncertainty
energy affordability talent
Russia
electric
energy
scale accidents
corruption World Energy Issues Monitor Global, 2012
talent
action
impact
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climate framework
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business critical vision & environment technology uncertainties
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Global dynamics action issues). The low impact/low uncertainty recession How to read the issue map issues include these of perceived lesser The maps are developed from an annual survey electric energy commodity importance which also include the storage prices weak of our global membership network, which electric unconventionals prices large scale signals. These may be issues that are still accidents vehicles terrorism includes thirty-six issues covering regional currency energy badly understood and need further investigation. China India nuclear innovativeinterconnection uncertainty subsidies macroeconomic risks, geopolitics, business hydrogen regulation The smart urgency of anrenewable issue is proportional to the economy trade barriers environment as well as energy vision to EU provide biofuels energies sustainable cohesion size grids of itscities bubble. Finally, capital issues are grouped in energy markets a high-level helicopter perspective. US Itpolicy reflectsbusiness cycle energy water efficiency four different categories, which are represented large scale nexus the views and insights of Ministers, CEOs, and hydro in different colours: macroeconomic risks Russia energy energy affordability leading experts in over countries that Brazil 90 need for poverty (orange), geopolitics and regional issues action represent the WEC community. The responses talent (purple), business environment (blue), and corruption are translated into issue monitors with the three energy vision & technology (green). In addition weak assessed dimensions as its axes (see Figure 1). signals to the critical uncertainties, issues of particular The three dimensions are the impact of an issue macro include interest for dialogue these with geopolitics business vision &rapid impact economic & regional environment technology on the energy sector, the degree of uncertainty evolution over time and these with large related to its impact, and the urgency with which differences across regions. we need to address the specific issue. ccs
Middle East
<< low
UNCERTAINTY
Issues with high uncertainty and high impact (in the north-eastern quadrant) are the critical uncertainties which keep Energy Leaders most awake at night as there is no clear path of action. These issues need to be part of the Energy Leaders dialogue and scenario analysis. The issues on the high-impact/low uncertainty side are issues that keep Energy Leaders most busy (south-eastern quadrant,
The arrows in fig. 3 illustrate the evolution of The illustrate the evolution of selected issues and issues clusters over three years. selected issues and issues clusters over three Regionalised issues mapping shows the years. Regionalised issues mapping in fig. 2 difference in regional perceptions with the global show the difference in regional perceptions with perception in the centre. the global perception in the centre.
2 Assessing the Global Energy Agenda by Christoph Frei
This years issues survey has been conducted in the context of a global recession that is symbolised by the lowest GDP growth in China for a decade, only 2% real growth in Brazil and, the Euro-crisis and related currency uncertainty. The geopolitical interests were focused on continued tensions and conflict in the MENA region, a new government in Egypt, a new old President in Russia, US elections and a new Chinese government, as well as the accentuated trade disputes regarding renewables and airline emissions. Closer to the energy business there were ample headlines related to the continued boom of unconventionals, numerous reports on companies (solar in particular) struggling for survival or going into insolvency. One year after the Fukushima accident the public debate continues on the nuclear front. The Doha Conference of Parties has prolonged the Kyoto protocol until 2020, but in absence of the largest emitters. Finally, UN Secretary General Ban Ki-moon has called energy the golden thread that runs through development in the UN declared year of sustainable energy for all, bringing energy back to the centre of the development discussion, 20 years after the Rio Earth Summit.
WECs latest Issues Monitor reflects the impacts of this backdrop on the leadership of the energy sector. The four top insomnia issues are the continued uncertainty towards a future climate framework, the fear of a lack of political stability in the Middle East / North Africa region, the high energy price volatility, as well as the global recessionary context, which has replaced post-Fukushima nuclear that was among the key critical uncertainties. It is worth noting that energy price volatility is much more than just the question of low natural gas prices and high differentials between regions that highlight transport bottlenecks, particularly to Asia. The coal to gas substitution in the US electricity mix has resulted in a higher gas than coal share for the first time in US history, with the consequence that US greenhouse gas emissions have decreased. This development has led to a push of discountpriced coal from the US to Europe where it has changed the competitiveness of the companies who took advantage of the changing dynamics compared to those who were locked into natural gas at European prices. This development has however pushed up Europes greenhouse gas emissions further away from previously reducing levels. Meanwhile,
Australia, on the way to become one of the worlds largest LNG exporters, has redirected its interest from North America to Asia and Canadas infrastructure companies have also started watching out for Asian customers. Price volatility is also about solar, where module costs have collapsed since 2008 from over 4.5 $/Wp to as low as 0.6 $/Wp. This is largely driven by low-cost production in China but has been accentuated by the fact that 2012 demand has not kept up with expectations and absorbed less than half of the global manufacturing capacity of about 100 GWp.
a partial substitution of coal input with solid biomass can mitigate CO2 emissions of existing plants. The issue that is most clearly identified as a game changer, with its solid trend towards the action space, is unconventionals. This is about unconventional oil (shale oil, tight oil, beyond Canadian oil sands or Venezuelan heavy or extra-heavy oil) as much as it is about the still-hot topic of shale gas. The technology revolution is continuing and while further progress is needed to address the energy-water nexus and the costs associated with mitigating greenhouse gas emissions, production volumes continue to increase. This has given rise to North American energy supply independence becoming a possibility within less than a decade. Such supply independence is however put into perspective as crude markets, and therefore prices are global and US prices will continue to depend on international developments. Meanwhile, we do not see other regions replicate the US success at the same speed for a number of reasons including geological, legal, logistical, financial and issues related to the water nexus. However, projects are being developed around the world which will eventually change the global supply map.
Where Energy Leaders have changed their views most radically

The issue with the most dynamic change over the past years is carbon capture, utilisation and storage (CCS/CCUS) which is almost flying off the map: without a formal price for CO2 emission avoidance this technology is at risk of simply being seen as adding cost and bringing down energy efficiency. This must be of highest concern as we lock ourselves into a high CO2 emission future for the next 40 to 50 years with every new coal and other carbon emitting plant that is built. Only a combination of CCS/CCUS and, possibly,
World Energy Issues Monitor Map geographical-tracking 2013 WorldGlobal Energy Issues Monitor Global, 2012
Figure 2
Figure 2 Global Map Geographical Tracking

climate framework issues tracking color: climate framework energy water nexus
NonOECD
uncertainty
LatAm MENA
NonOECD
G20
climate framework Europe
issues tracking color: climate framework energy water nexus
Africa
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Africa Europe LatAm Africa Asia

NAm
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G20 NonOECD NAm MENA
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need for action
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weak weak signals signals
OECD
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Europe
impact
impact
.
critical framework gas prices make climate nuclear more expensive Post Fukushima nuclear remains a closely NonOECD issues tracking color: uncertainties and therefore not an attractive option and observed and debated issue. Last years map climate framework energy water nexus Germany is continuing saw nuclear jump into the high uncertainty G20to implement its LatAm decision of the Energiewende, with space. This years position of nuclear on the Europe OECD Asia MENA increasing concern that the transition could monitor shows that uncertainty is almost back NAm Africa fail if it comes at too high a cost. to where it was before Fukushima. However, a slightly lower perceived impact indicates that Africa What Asiakeeps Energy Leaders the nuclear renaissance has been slowed LatAm down a message that also came out of most busy WECs World Energy Perspective: Nuclear NonOECD NAm G20 Renewable energies and energy efficiency Energy One Year After Fukushima report. have stayed dominant MENAissues in the action OECD Recent signals from Japan suggest a re- energy water need for nexus space. Renewables are not only driven by evaluation of the role for nuclear in the action Europe climate policy as shown by the weak countrys energy mix, even though only two out regional correlation between climate of fifty-four plants have resumed operation. weak signals framework uncertainty and renewables. China has cancelled 2nd generation impact plants that Renewables are seen as a contribution to are not already under construction and is diversity and security of supply as well as a concentrating on 3rd generation along the critical enabler to enhancing access for the coastline. In India we see continued local 1.3 billion without access to energy. Large manifestations against nuclear and there are hydro is moving into the action space, active discussions about the right share of explained by huge un-used potential in nuclear in both France and South Korea. central Africa, Latin America, Russia and Meanwhile, more supportive signals for nuclear Canada. Regional interconnection, which come from countries including the UAE and is often the feasibility basis for large Saudi Arabia, with recently announced energy projects, is also robust in the action ambitious 2030 objectives. In the US the low space. uncertainty
Figure 3 World Energy Issues Monitor Global Map time-tracking Global, 2012 Figure 3 WECs 2013 World Energy Issues Monitor: illustration of regional differences
issues tracking color: ccs energy efficiency
uncertainties 2011
2011
uncertainty uncertainty
renewable energies issues tracking color: unconventionals ccs

energy efficiency nuclear renewable energies unconventionals
2009 ccs 2011

2009 2011
critical
2010
high >>
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ccs
2010 2011 2010

2011
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unconventionals nuclear
unconventionals 2009
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2011 2011
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renewable energies
renewable energies 2009
2011 2009 energy
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2010
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2009
energy 2009 2010 efficiency
2010 efficiency
weak signals
weak signals impact impact
need for action action
need for
What should make us think issues tracking color: ccs further energy efficiency
uncertainty
2009 unconventionals Last but not least, it is interesting to note that nuclear 2011 concerns for climate and water ccs issues seem not to be shared by the same people. Many of the regions that are mostly concerned about 2011 the energy-water nexus are among the least concerned when it comes to climate framework uncertainty. This should make us think, acknowledging the IPCCs statement that the first thing that we will see from a changing climate is a changing availability of water. Or, does it simply mean that the regions most weak concerned about water and less about climate signals framework uncertainty have simply accepted impact that it is all about adaptation? renewable energies
In summary, many of the issues that were critical emerging over the past years uncertaintieshave stabilised their position or confirmed their trend, both up and down: 2011
2010 2010
Among the big question marks that hasnt settled yet remains what will happen to nuclear post Fukushima. unconventionals
2011
nuclear
Making sense of the energy 2011 sector is renewable energies fundamental to the wealth of nations and 2010 energy 2009 this report is 2009 one of the only tools available 2010 efficiency to policymakers to enable them to understand the global, regional and need for national trends affecting their decisions. I action pledge the support of the World Energy Council to those tasked with taking the hard decisions required to transition to a better future.
2009
Climate framework uncertainty CCS/CCUS Renewables or energy efficiency Unconventionals
3 Assessing Regions Critical Energy Agenda Analysis of WECs six Regions for Issues Maps
3.1 Africas Critical Agenda
While global recession has affected Africa heavily, the economic growth and energy poverty/access issues remain major concerns. They have been affecting the continent because its electricity demand has grown, and energy security has tightened as the result of the lack of the required investment and increasing power shortages across the continent. In addition to this, with economic cooperation with China and India intensifying, more exploration activities in a number of countries, particularly in Southern, West and Central Africa are turning out positively and have unveiled huge potential of hydrocarbon prospects and new potential markets. In contrast climate change issues have been considered as a lower priority on the overall agenda. Middle East dynamics and global recession issues are coming as high critical uncertain issues to Africa as a continent. The continent has seen trade barriers and terrorism as similarly uncertain issues as both of them have been strongly affecting the sustainable development of the African economy as a whole. Large scale hydro and regional interconnection are the issues that are highly uncertain and have seen significant changes recently. Large scale hydro is considered as the most inexpensive, efficient and affordable form of renewable energy, with a large potential yet to develop in Africa (only 7% potential developed the lowest rate of the worlds regions). While uncertain it seems many policymakers and energy experts have voiced the importance of large scale hydro development, along with taking a realistic approach to forming and developing projects, to build necessary capacity and infrastructure, and to implement them as timely as possible. Otherwise it would take such a long time before coming on stream, whilst energy demand is catching up much faster than expected leading to a widening gap between supply and demand for electric energy. In addition to large scale hydro, regional interconnection is gaining ground with the development maturity of the five power pools. Moreover, with huge gas reserves and its new discoveries, further development and prospects of LNG markets and cross-border pipelines are anticipated. Energy efficiency, renewable energy, energy prices and energy poverty are also viewed as requiring bold immediate actions in the issues map. Energy poverty, in particular,
4 10Figure Regional Map Africa
World Energy Issues Monitor Africa, 2012
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trade barriers regional interconnection terrorism energy water China global recession nexus India innovative regulation large scale energy hydro poverty commodity prices energy affordability Middle East energy capital trade renewable dynamics prices regional markets barriers sustainable energies citiesframework Middle East dynamics
Figure 4 Regional Maps - Africa

World Energy Issues Monitor Africa, 2012
US policy currency uncertainty electric vehicles EU cohesion electric storage ccs large scale accidents Brazil nuclear biofuels smart grids unconventionals business cycle energy subsidies climate framework
uncertainty
Russia
corruption
weak signals
US policy currency uncertainty ccs

talent
electric vehicles
hydrogen economy
business cycle energy subsidies
EU cohesion
electric storage
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Brazil nuclear
Russia
biofuels smart grids
corruption
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interconnection energy terrorism energy water efficiency China global recession nexus India innovative regulation large scale energy hydro poverty commodity prices energy need for affordability energy capital renewable action prices markets energies sustainable cities energy efficiency
business environment vision & technology
climate
uncertainty
impact
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hydrogen economy
unconventionals
World Energy Issues Monitor talent Africa, 2012
need for action
impact
uncertainty
US policy currency uncertainty
has been an immediate priority for Africa as ccs electric vehicles the population with access to electricity is no Brazil large scale electric accidents more than 30% in Sub-Saharan Africa. EU cohesion storage
Russia smart grids unconventionals talent hydrogen economy
business cycle energy subsidies
Middle East trade dynamics regional barriers business geopolitics vision & climatemacro interconnection economic & regional framework environment technology terrorism energy water China global recession nexus India innovative regulation large scale energy hydro poverty commodity prices energy affordability energy capital renewable prices markets energies sustainable cities energy efficiency
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Figure 5 Regional Map Asia
Figure 5 Regional Map - Asia

World Energy Issues Monitor Asia, 2012
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climate framework critical
climate
electric storage
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electric storage
hydrogen economy
hydrogen economy
UNCERTAINTY
ccs
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recession currency uncertainty Middle East currency renewable biofuels uncertainty dynamics Middle East nuclear energies renewable biofuels dynamics Commodity nuclear vehicles energies energy electric Commodity prices terrorism energy electric vehicles subsidies energy water prices terrorism subsidies energy water China large scale nexus large scale unconventionals China accidents nexus innovative trade India unconventionals accidents innovative trade India regulation barriers regulation barriers energy Sustainable energy regional regional Sustainable poverty poverty interconnection talent talent cities interconnection cities
global uncertainties framework recession global energy prices energy

prices
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US policy US policy BusinessBusiness cycle cycle Russia

EU Cohesion EU Cohesion Russia corruption corruption weak
capital large scale large scale capital energy energy markets hydro hydro markets affordability affordability
smart grids smart grids
energy energy efficiency efficiency
signals
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need for need for action action
Brazil
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impact
impact
economic & regional macro environment technology geopolitics business vision & economic & regional environment technology
macro
geopolitics
business
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viewed as critical, as Saudi Arabia climate like may export more oil to states electric framework storage The region has witnessed strong China and India whereglobal there would recession and rapid economic growth in be expected much demand for currency energy uncertainty prices East renewable some of its states, including China those resources. AsMiddle a result, biofuels hydrogen dynamics nuclear energies economy Commodity energy and India. Such rapid growthterrorism has electric vehiclesSaudi Arabia might be shifting its prices subsidies energy water scale created some problems like energy exports away from European China large nexus unconventionals ccs accidents innovative trade India regulation barriers shortages and energy gapsenergy states, and also Japan and Korea regional Sustainable between the haves and thepoverty interconnection may talent be importing cities more LNG from large scale capital energy have-nots. The renewable energy hydro markets energy overseas sources like Qatar.efficiency To smart grids affordability growth, pilot Emission Trading meet the energy demand of their US policy Business System (ETS) and cycle energy continuously growing economies, EU Cohesion corruption Russia efficiency targets in China, as well India and China need will for further action as Indias Perform Achieve Trade increase the share of imported Brazil (PAT) Energy Efficiency coal and hence rely on cheap weak Certificates Trading Scheme may energy sources to fuel their own signals also have some influence over economic development. Thisvision in& macro geopolitics business impact economic & regional environment technology their future energy policy and turn, has negative impacts on economy in this part of the world. climate change although both countries have set their targets. Energy prices, climate framework, global recession and Middle East dynamics are considered as the most critical uncertainty issues for the region. Recent developments in the Middle East are certainly
uncertainty
3.2 Asias Critical Agenda
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India has mandated the early retirement of inefficient coal-fired power plant in their National Action Plan on Climate Change, while in China, according to U.S. EIA statistics & analysis, the government's 12th Five-Year Plan calls for a production ceiling of 4.4 billion short tons 3.9 billion metric tons and capacity ceiling of 4.1 billion metric tons by 2015 in an attempt to control the production growth of coal. In this part of the world, issues that have seen the highest changes are electric storage and smart grids which have gained ground as people may expect that technology to solve electricity shortage of some states. This is followed by currency uncertainty and global recession, both of which have been quite affected by the European economic crises. CCS, on the contrary, has continued to lose its ground and as a result, its importance on the overall issues map. Energy subsidies and energy efficiency are issues that are viewed by politicians and energy leaders in the region to require action. Some countries have experienced rapid electricity demand growth under their distorted energy price structures where the electricity tariff has been kept low, below its production cost,
and therefore does not properly reflect the cost of all energy resources for electricity. This is basically due to government regulation. Even worse, the incentive for enhancing energy efficiency of the high energy intensive industries does not work well under such electricity price regulation schemes, with subsidised and hence cheap electricity prices, as it creates disincentives for investment. To overcome this dilemma, governments in the region should build up a cost-reflective energy price policy to attract voluntary energy saving from consumers which in turn could lead to a reduction of imports of primary energy sources. In addition to energy efficiency, the two issues requiring action are smart grids and sustainable cities models as they may deal with increasing demand for electricity and shortage of electricity supply issues more effectively. While not strongly represented on the issue map for its actions, energy poverty in the South Asia and Pacific region needs to be dealt with most immediately.
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Figure 6 Regional Map Europe
Figure 6 Regional Map Europe

World Energy Issues Monitor World Energy 2012 Issues Monitor Europe,
Europe, 2012
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critical critical uncertainties uncertainties
ccs
ccs
climate climate framework
uncertainty
framework
uncertainty
commodity commodity prices prices

innovative innovative regulation regulation Business Business cycle cycle
energy energy Middle East Middle East prices prices global global dynamics dynamics recession recession unconventionals unconventionals
electric Cohesionelectric EUEU Cohesion storage storage energy energy efficiency efficiency large largescale scale accidents accidents
UNCERTAINTY
high >>
terrorism
hydrogen hydrogen economy economy terrorism biofuels
electric electric vehicles vehicles
currency uncertainty uncertainty biofuels US policy energy affordability large affordability large hydro
energy
US policy
currency
nuclear nuclear energy energy subsidies regional subsidies smart grids regional smart grids interconnection interconnection capital markets capital markets
Russia
Russia
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signals trade barriers barriers nexus corruption energy water nexus corruption
trade
weak
Brazil energy energy poverty poverty energy water
Brazil
scale scalehydro
sustainable cities cities
sustainable
renewable renewable energies
energies
China India
China India
talent
need for need for action
talent
action
weak signals
impact
impact
macro economic
macro economic
vision & technology
vision & technology
World Energy Issues Monitor Europe, 2012
3.3
Europes Critical Agenda

ccs
Energy consumption has been shrinking in Europe in particular in the energy commodity intensive industries. This has led to an prices over-supply of energy, and a weakening of the profitability of investments already Business undertaken. Climate framework cycle is quite hydrogen an economy uncertainty, since currency no significant terrorism uncertainty progress has been made with the ETS US policy energy which has not sufficient biofuels provided affordability large scale incentives forBrazil investors with no goals hydro energy trade beyond 2020. poverty A low carbon price does barriers water not supportenergy the long-term goals of GHG nexus corruption gas emissions, making CCS or more weak signals efficient gas power plants lessinvestable. The increasing impact share of renewables in the total electricity production also fuelled a debate about electric systems upgrading and ancillary cost due to increasing technical and market integration. Shale as development in Europe is much contested out of environmental concerns underlining the
uncertainty
critical potential importance of and dependency uncertainties on gas imports in the future. climate
energy The two top Middle critical uncertainties in East prices global dynamics Europe are the climate framework and recession unconventionals energy efficiency. The climate roadmap innovative energy electric Cohesion regulation efficiency 2050EU helps Europe to describe the future storage nuclear large scale electric energy obligations more precisely. However, the accidents vehicles subsidies smart grids regional uncertainty is still high as the 2012 EUinterconnection Russia capital markets (*1) Energy efficiency Directive does not renewable sustainable energies provide any ambitious binding incentives. cities China India As a result, the achievement of final need is for objectives is doubtful. While Europe action talent also in the midst of an investment cycle in order to replace old generation assets, the fact that some local consumers have been paying for thegeopolitics highly polluting and macro business vision & economic & regional environment technology inefficient power plants that are required to flexibly cope with unstable power supply (which typically happens in cold winters), while promoting renewables at the same time seems to go against the overall goal of climate agenda. framework
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One of the highest change issues is unconventionals i.e. the use of and the generation of electric energy from unconventional energy sources, such as shale oil and shale gas. While the shale gas development has been much contested in many European states, low gas prices have continued in the US. If this is the case, the economic impact of the unconventionals could be felt in two ways: Firstly, as a pressure on the gas prices in the European market, and consequently it would also add pressure on the existing long-term contracts with price indices that do not reflect changes in market prices for natural gas. Secondly, due to the relatively cheaper gas of the US, some large gas-consuming companies are considering building their new industrial sites in the US, leading to lower demand for natural gas in Europe. Nuclear is another issue that has changed significantly, which has lost importance, although many European countries have taken nuclear as part of the solution for climate change equation. A declining economic outlook for Europe, however, has also slowed down the progress of developing new nuclear projects. With shale gas becoming more available in the US, the coal exports to Europe have increased significantly from 2010 to 2011. The US continues to become a global coal supplier, especially to Europe.
According to leading energy experts and policy makers, the following issues require actions to be taken. First, regarding renewables, some renewable energy producers are in economic trouble because of the economic downturn and retroactive cuts of the European promotion schemes such as feed-in-tariffs. These schemes should be more aligned with each other and with the internal European market. Second, as far as Russia is concerned, it would be necessary to establish price-indexed formulas for natural gas imports without compromising the objectives of long-term gas contracts, i.e. to find a balance between competitive gas prices and secure delivery/supplyrelations. Third, with regard to China, as it has become an enormous energy consumer (which affects European energy markets and prices), Europe must get ready for it by reducing the fossil fuel demand in the long term, this may be encouraged by a strong price signal for CO2.
(*1) Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC
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Figure 7World Regional Monitor Latin America EnergyMap Issues Figure 7 Latin America, 2012 Regional Map Latin America
World Energy Issues Monitor Latin America, 2012
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critical uncertainties critical uncertainties
energy prices
energy prices
climate framework terrorism ccs

terrorism climate framework
global recession ccs Middle East trade global recession dynamics barriers renewable energies Middle East trade energy water nexus dynamics barriers biofuels corruption renewable energies energy water nexus electric storage talent biofuels corruption smart grids capital markets electric storage talent
smart grids
commodity prices
commodity prices large scale China hydro India
currency uncertainty
currency EU uncertainty Cohesion electric vehicles EU Cohesion electric
nuclear
nuclear US policy US policy
energy subsidies large scale China hydro India energy unconventionals innovative subsidies regulation Business cycle
Business cycle energy efficiency
energy efficiency
hydrogen economy
hydrogen economy
vehicles
energy capital markets affordability regional energy affordability interconnection

regional interconnection
scale innovative unconventionals large regulation accidents

Russia
sustainable cities Russiaweak
Brazil energy poverty

energy poverty Brazil
sustainable signals cities weak signals
need for action need for action
impact
impact
World Energy Issues Monitor Latin America, 2012
macro geopolitics business vision & economic & regional environment technology macro geopolitics business vision & economic & regional environment technology
impact impact
climate framework
uncertainty
terrorism ccs
3.4
unconventional energy commodity energy prices prices concerned -- in particular dynamics for shale gas and oil shalelarge --scale finding barriers China hydro renewable energies India currency shale resources and developing these energy water nexus energy The global recession, energy prices, uncertainty subsidies biofuels corruption nuclear sources and then bringing the energy to unconventionals and development of EU electric storage talent innovative unconventionals Cohesion electric the market are two separate issues. regulation large scale hydro systems are the major vehicles US policy smart grids capital markets hydrogen large scale Whilst in some countries of LAC, shale issues economy or concerns for leading energy accidents Business gas exploration might be a more energy cycle experts and policymakers in the Latin affordability economic and hence a viable option, infor need Russia regional American and Caribbean region (LAC). energy Brazil interconnection sustainable efficiency in hydro will become action others, investment cities Moreover, the regions economy has energy more significant (e.g. Brazil). strong ties poverty with that of China as the region exports coal, oil, gas and other signals commodities to the country to guarantee impact their prosperity. With the nationalization of Repsol YPF oil company in Argentina (which turned Argentina from an exporter of oil and gas about a decade ago to an importer of much needed fuel,) state intervention (subsidies, price caps and export excises) may have led to hampering some investors for their willingness to invest in E&P.
weak
Latin America & Caribbeansglobal recession As far as resources are Middle East Critical Agenda trade
The regions critical uncertain issues are macro geopolitics business large scale hydro, energy prices, vision and& economic & regional environment technology commodity prices, all of which could impact have quite an influence in terms of energy security and the economy. In particular, the potentiality of large scale hydropower to meet future electricity demands would be more critical as it may offer competitive energy prices for the region. Commodity prices, including
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crude oil, may become another critical uncertain issue as it would be affected by struggling global economy or China/India economy which may not going as fast as previous years. As an issue on the energy policy agenda, climate framework does not seem to have such a high impact as it has on the global agenda or in other regions or as of in previous years, though it still remains in a high uncertainties area on the issues map. High change issues are renewables, CCS and electric vehicles. Renewables and CCS have moved down to a lower impact area on the issues map. In contrast, large scale hydro moves up straight to the high impact, uncertain area, receiving much more attention than renewables. In terms of price competitiveness, hydro would be far stronger than photovoltaic/solar or wind. The electric vehicles become an issue with far less impact or uncertainty attached to it. Therefore, while still in the uncertainty area on the issues map, large scale hydro may be one of the most important issues that require immediate action to be taken as it might be a major source of electric energy for countries in the
LAC region. Problems often associated with the construction of new large scale hydro power, such as social issues, environment issues, technologies and capital market situations need to be solved altogether. Accordingly, innovative regulation and regional interconnection need action as they are related to this issue of investment in and the construction of new large scale hydro power Though energy poverty may look less important as an issue in this years issue map, the importance of this issue may be still felt as it might require more action than can be seen on the map.
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Figure 8 Regional Map MENA
Figure 8 Regional Map MENA

World Energy Issues Monitor MENA, 2012 World Energy Issues Monitor MENA, 2012
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critical uncertainties critical uncertainties
global recession
global China recession India China India
hydrogen economy
hydrogen economy
Brazil
Brazil biofuels
ccs
biofuels
ccs
Middle East large scale unconventionalsSustainable accidents dynamics EU cities Middle East cohesion dynamics Sustainable Russia currency EU talent cities cohesion energy uncertainty energy nuclear Russia subsidies currency Business affordability talent cycle trade barriers energy uncertainty energy regional nuclear energy interconnection commodity subsidies renewable Business affordability efficiency energies prices cycle trade barriers regional large energy renewable interconnection commodity scale energy energies prices water efficiency corruption hydro large nexus Innovative scale energy water regulation corruption hydro nexus Innovative regulation
US policy
US policy
climate framework smart electric grids climate framework vehicles electric smart storage electric grids vehicles large scale electric accidents storage unconventionals
energy prices
capital energy markets prices capital markets
weak signals weak signals
energy poverty terrorism energy poverty terrorism
need for action need for

action
impact
impact
World Energy Issues Monitor MENA, 2012
3.5
uncertainty
Middle East and North Africas Critical Agenda
renewables, this may also have weak negative effects on the demand for signals primary energy sources from this impact region. However, like the cases of Saudi Arabia, it would be possible to minimize such adverse effect on demand reduction as they could divert their export of fossil fuel to other destinations, such as China or India where there is strong and increasing demand.
critical Middle East dynamics, as geo-political uncertainties issues, notably sabre-rattling over the Iranian nuclear industry, is a critical global large scale unconventionals accidents on US uncertainty the issues recession map, The 52% of the hydrogen region accounts for policy Middle East China economy dynamics the Sustainable particularly for states the India world proven oil reserves, 42% of the EU Brazil cities cohesion Cooperation Council for the Arab States gas reserves; and its Russia sustainable currency talent biofuels energy uncertainty of the Gulf (GCC) as the GCC member energy energy growth depends on steady oil and prices nuclear gas subsidies capital Business affordability ccs states feel that they have little influence markets cycle trade barriers by regional demand, which has been influenced energy renewable interconnection commodity over the issue but face huge efficiency risks in the energies prices global recession, as well as by China large event of conflict. Other critical scale and India economy. Given future energy water corruption hydro nexus uncertainties include energy prices, and Innovative climate framework of some European regulation global recession, i.e., lower economic countries, to promote de-carbonization need for growth in key markets. action by replacing oil and gas resources with energy
climate framework smart electric grids vehicles electric storage poverty
High change issues on the issues map are nuclear, CCS and unconventionals. macro geopolitics vision & Nuclear, one economic year after the business Fukushima & regional environment technology accident, has gone to a low uncertain and lower impact area. It is picking up in UAE or Saudi Arabia reflecting a growing acceptance that nuclear energy remains a valid alternative and strategically effective towards diversifying the potential future energy mix, where rapidly-growing domestic power demand has eaten into
terrorism
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hydrocarbons available for export. While the issue of CCS is becoming less prominent on the issues map. GCC member states are now implement the regions first Carbon Capture and Storage projects, such as UAE testing the enhanced oil recovery performance which may add more value to CCS. As far as unconventionals are concerned, regional oil and gas producers see its reserves as the way forward. Ultra-sour gas in very tight reservoirs hitherto considered non-commercial is now being developed to supply growing markets. The region has seen the importance of renewables grow, such as solar to make up for domestic oil consumption growth. While countries are highly dependent on oil/gas exports for their economic growth, energy efficiency should be another issue to be dealt with to cope with local demand for energy. Ensuring electricity supply for both air conditioning and desalination purposes is a priority. The region also needs investment to cope with the energy poverty or access issues. The region could be a real front runner, as we have seen in the Masdar Project in Abu Dhabi, UAE which seeks to deliver the concept of a green city. Similar growth of renewables may also
be observed if they could successfully develop DESERTEC DESERTC for example. The benefit could be to further strengthen ties with Europe in terms of economy, energy security, technology and mutual goal of decarbonisation.
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uncertainty
Figure 9 Regional Map North America Figure 9 World Energy Issues Monitor Regional Map North America North America, 2012
World Energy Issues Monitor North America, 2012
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critical critical uncertainties
uncertainties
unconventionals
ccs
ccs
uncertainty
high >>
electric storage
electric storage
biofuelsbiofuels
Middle East Middle East dynamics climate dynamics climate framework
unconventionals
framework
UNCERTAINTY
Brazil terrorism
Brazil terrorism
electric hydrogen hydrogen electric vehicles economy vehicles economy
global global recession recession

large large scale scale accidents accidents nuclear
<< low
EU Cohesion
US policy currency US policy ChinaChina IndiaIndia currency renewable uncertainty renewable energies uncertainty trade barriers Innovative sustainable Russia energies trade barriers Innovative regulation sustainable energy Russia cities Commodity regulation corruption energy talent cities water Commodity prices regional EU corruption nexus talent water smart grids prices interconnection Cohesion regional nexus smart grids interconnection energy affordability
nuclear
weak Energy signals
Energy poverty
poverty
weak signals impact
energy energy affordability markets Business prices capital energy cycle large Business markets energy prices scale cycle efficiency large hydro energy scale efficiency hydro
capital
energy subsidies
energy subsidies
need for need for action
action
impact
macro economic
vision & technology
macro economic
vision & technology
World Energy Issues Monitor North America, 2012
3.6
power plant is under construction critical with uncertainties additional major transmission lines being planned to be constructed across the As the global recession goes on, a Middle East border e.g. from Quebec to New York unconventionals dynamics massive shift from coal to natural gas electric storage climate City, aiming at framework the US market. In Mexico, utilisation in United States has made it biofuels with respect to climate change globalpolicy, the recession possible for them to be on target to electric hydrogen government enacted a climate change large vehicles economy achieve their goal of CO2 reduction with Brazil scale law in 2012 in whichaccidents one of its goals is respect to the Copenhagen accord US policy China India currency renewable that by 2024, 35% of the electricity terrorism uncertainty nuclear energies although the US government has not set trade barriers Innovative sustainable Russia generation will be carried out with clean regulation energy cities Commodity a climate change policy. The demand for corruption talent water prices fuels; renewables, nuclear and fossil fuels regional EU nexus smart grids energy, electricity and gasoline has interconnection Cohesion with CCS. energy affordability dropped in part due to the recession and need for capital energy markets Business prices Energy action also due to significant efficiency gains in cycle Mexico has alsoenergy shifted to natural gas to large poverty energy subsidies scale automobiles, building, and appliances. efficiency replace aging fuel oil electricity generation hydro weak Unconventional gas development in the as well as to satisfy the continuous signals US has been successful, providing natural growing energymacro demand; its participation geopolitics business vision & impact economic & regional environment technology gas at far lower prices for domestic in the gross internal supply has increased consumption than other regional markets from 33% in 2000 to 42% in 2010. around the globe. Thus, the US will The most critical uncertainty in the region become more self-sufficient due to shale on the issues map is global recession, gas development and domestic petroleum where and when the recovery or production. strengthening of the economy happens. In Canada, hydro power business The impacts on the energy sector from remains significant. 10,000MW of hydro tax reform in the U.S. and timing of
ccs
North Americas Critical Agenda
uncertainty
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mandates for GHG reductions are also a critical uncertainty with some impact across the region where cross border enterprise in wind power pertains. As far as Nuclear, it appears as a more critical uncertainty in North America as compared to the global level. This is likely to be because North America has the largest number of nuclear plant (U.S. over 100) and they are aging. Even with life extension granted for 20 more years, most existing plants will be retired by 2050 when the U.S. power system is expected to be decarbonized. Questions therefore arise if these facilities can be replaced. The current and projected future price of natural gas calls into question the economic viability of new nuclear and if the country will pay a price premium for zero CO2 emission power and for diversity of supply. Canadas nuclear industry remains uncertain, with aging infrastructure, some closures and slow decision making on refurbishment, let alone on the creation of new facilities. Access to and diversification of markets for Canadas energy products is a continuing uncertainty. Renewables markets have a large domestic element but cross border activity, particularly with
the United States presents challenges. Again, as illustration, the U.S. wind power production tax credit and its renewal will influence the development of wind power in Canada. The tax credit represents an incentive to some of the Canadian wind power industry that will turn upon renewal. Larger development of the domestic market for renewables, broadly speaking, rests upon the increase and continued existence of subsidies. Regarding oil and gas, for both conventional and nonconventional, Canadas primary market the United States is shifting with its own capacity on the increase. International markets outside of the continent present opportunity. However, the ability for Canada to export its oil and gas product outside of North America is constrained through insufficient infrastructure. In North America unconventional oil and gas are a rising issue, which is more predominant than anywhere else in the world given that its prospects look much more successful. However, questions arise over the environmental regulatory treatment of hydraulic fracturing and this issue might in turn be linked to the issue of the energy-water nexus. This technology is essential to tap into unconventional resources. Hence, if
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banned (as in the case of parts of New York state) its future production levels are threatened. It should be noted that decades of experience indicate that fracturing is safe and water issues can be properly addressed if industry best practices are followed. Additionally, CCS, is seen as both uncertain and impactful, given that it is critical to continue the use of fossil fuels in a carbon constrained world and because North America has by far the largest number of CCS demonstration plants: 8 industrial scale units in the U.S. and 2 industrial scale units in Canada will become operational by 2020. And since 6 of those units are intended for enhanced oil recovery CCS becomes more highlighted in the context of utilizing CCUS technology (with utilization adding value to CCS by providing a revenue stream to CCS plants). However, a more progressive roadmap or actions will be required to enable the CCS/CCUS technology to become established, rather than remaining in the demonstration phase. In Mexico the large fossil fuels and electricity subsidies are an important economic issue with a high degree of uncertainty to reduce or eliminate them due to the political implications.
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4 Assessing Countries Critical Energy Agenda Analysis of five selected countries for Issues Maps
4.1
Energy subsidies and high energy prices are critical uncertainty issues as they are both affecting social equity, although energy subsidies could be effective and efficient when applied in the right way. Smart grid is also quite a critical uncertainty issues as it lacks regulation for proper return on investment or financial support. Energy efficiency may be an important factor in influencing smart energy consumption and might help to achieve overall sustainability. In addition, large scale hydro needs action as it is an uncertainty issue. Though Colombia has potential to develop this resource, only a small fraction of the overall potential resources has been developed so far. In order to develop these sources further, it will be necessary to reconcile with regulation as the dam puts impact on society, animals and environment by flooding of farmland and forests.
Colombias Critical Agenda
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uncertainty
Figure 10 National Map Colombia
World Energy Issues Monitor Figure 10 National Map Colombia Colombia, 2012
World Energy Issues Monitor Colombia, 2012
terrorism electric storage
electric storage
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critical
smart grids
smart grids unconventionals
terrorism
2013 World Energy Issues Monitor World Energy Council uncertainties

energy subsidies Innovative regulation global recession
global recession
unconventionals
uncertainty
high >>
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UNCERTAINTY
hydrogen economy
hydrogen economy
ccs
ccs
middle east dynamics

middle east sustainable dynamics cities
corruption energy electric subsidies vehicles
Russia
weak signals
4 Assessing Countries Critical Energy Agenda Analysis of five selected countries for Issues Maps
EU cohesion nuclear
EU cohesion
nuclear
Russiasignals
weak
corruption energies electric climate Innovative renewable vehicles sustainable energy regulation framework energies cities climate water energy prices large scale framework commodity nexus energy accidents prices energy water energyenergy prices large scale regional nexus commodity affordability accidents interconnection efficiency prices talent energy energy regional biofuels affordability interconnection efficiency Business talent China biofuels energy poverty cycle India China Business large scale capital energy poverty cycle India hydro large scale markets capital trade hydro markets Brazil barriers trade need for barriers Brazil
renewable
<< low
US policy
US policy
need for action action
impact impact
macro macro geopolitics vision geopolitics business business vision& & economic economic & regional & regional environment environment technology technology
World Energy Issues Monitor Colombia, 2012
Energy subsidies and high energy electric storage prices are critical uncertainty issues as hydrogen they are both affecting social equity, economy middle east although energy subsidies could be dynamics ccs effective and efficient when applied in sustainable cities the right way. energy EU water Smart gridnuclear is also quite a critical cohesion nexus uncertainty issues as it lacks regulation talent biofuels for proper return on investment Business or currency cycle uncertainty financial support. Energy efficiency capital markets trade may be an important factor in barriers Brazil influencing smart energy consumption Russia and might help to achieve US overall policy weak sustainability.
uncertainty signals
4.1
Colombias Critical Agenda
terrorism unconventionals
global recession corruption renewable energies smart grids
energy subsidies Innovative regulation electric vehicles
climate framework
energy prices large scale commodity accidents prices energy energy regional affordability interconnection efficiency China India energy poverty
large scale hydro
need for action
In addition, large scale hydro needs action as it is an uncertainty issue. Though Colombia has potential to develop this resource, only a small fraction of the overall potential resources has been developed so far. In order to develop these sources further, it will be necessary to reconcile with regulation as the dam puts impact on society, animals and environment by flooding of farmland and forests.
impact
macro economic
vision & technology
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Figure 11 National Map Germany
Figure 11 National Map Germany

World Energy Issues Monitor 2012 Monitor World Germany, Energy Issues
Germany, 2012
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weak signals
corruption
energy water energy nexus water nexus
electric global storage electric recession Middle East dynamics unconventionals global storage energy EU energy recession prices energy cohesion unconventionals efficiency energy EU subsidies Innovative energy capital prices energy cohesion efficiency regulation markets subsidies Innovative renewable electric capital regulation energies vehicles markets trade hydrogen renewable regional electric Business smart commodity barriers economy energies interconnection vehicles trade cycle hydrogen grids prices regional biofuels Business smart commodity barriers economy currency interconnection talent nuclear cycle grids large scale China India prices biofuels uncertainty US policy Russia accidents currency talent nuclear large scale China India uncertainty US policy Russia accidents sustainable cities terrorism energy affordability sustainable cities large terrorism energy scale affordability large hydro scale hydro Middle East dynamics
ccs
ccs
critical Climate uncertainties framework
Climate framework
energy corruption poverty energy poverty
weak signals
Brazil
Brazil
impact impact
World Energy Issues Monitor Germany, 2012
ccs East dynamics paid whetherelectric or not global the power has Energiewende (Energy Middle turnaround) Climate storage recession framework been picked up, energy and they will not pay unconventionals takes place in the country, and it EU energy prices energy cohesion the transportation of electricity. The efficiency seems to further accelerate subsidies the Innovative capital regulation country has been markets paying 5 cents/kWH building of new power plants renewable electric as they energies vehicles for wholesale plus the premium of trade hydrogen have decided to fully exit out of nuclear regional Business smart commodity barriers economy interconnection above 5 cents/kWH for renewables. cycle power by 2022. Energiewende is not grids prices biofuels currency talent nuclear large scale China India Germanys sole issue, and itUSmight uncertainty policy Russia accidents The necessary action includes that the energy affect other neighbour countries as it is sustainable cities market model/grid need to be rewater terrorism energy nexus not confined within the country. With affordability large designed. Though some investment is scale PV plus 20GW of wind weak 30GW of Solar hydro happening, it is mostly encouraged by signals power installed, on windy sunny need side for is the feed-in tariffs, and the down holidays, the German electricity action Brazil the country or most of other Europe corruption transmission network might need to countries cant cope with it so easily. energy get ready for more frequent crosspoverty border exchanges of power with its The removal of trade barriers and the macro geopolitics business vision & impact economic neighbours while conventional plants regional environment technology protection of & intellectual property rights have to stop and stay in stand-by. It for inventions [patents and license] are would also require the grid expansion priorities as the country is more tied to of transmission and distribution lines China/India economy. as well. All of them would result in costing consumers much.
4.2
Germanys Critical Agenda
critical uncertainties prices for 20 years ahead, they get
uncertainty
Energy price is significant issue. The investors to renewables are well covered as they have guaranteed fixed
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12 Monitor 2013 WorldFigure Energy Issues National Map India
Figure 12 National Map India

World Energy Issues Monitor India, 2012
terrorism currency uncertainty
climate framework
25
energy prices
prices
hydrogen economy electric vehicles
energy water nexus
ccs
ccs
biofuels
biofuels
China India energy unconventionals currency Middle East subsidies uncertainty dynamics climate talent corruption energy water nexus innovative framework regulation nuclear electric China India vehicles energy unconventionals US policy Middle East subsidies capital trade barriers electric dynamics talent markets Russia corruption energy innovative storage regional EU regulation nuclear poverty interconnection renewable US policy cohesion energy capital trade barriers energies smart electric commodity affordability markets energy large storage grids regional prices poverty scale EU interconnection renewable cohesion large scale energy hydro energies Brazil smart commodity accidents sustainable affordability large global grids prices cities energy recession scale large scale hydro efficiency Brazil accidents
hydrogen economy Russia recession Business cycle Business cycle global sustainable energy cities efficiency
terrorism
critical uncertainties energy
weak signals
weak signals
need for action
need for action
impact
impact
macro economic
macro economic
vision & technology
vision & technology
4.3
Other issues that need critical action are uncertainties energy efficiency, sustainable cities terrorism energy prices currency and commodity prices. Energy poverty hydrogen uncertainty Critical uncertainties are volatile energy climate economy should energy be looked In fact, the framework water nexus at as well. electric prices, climate framework, energy China India issue is closely linked to climate vehicles energy unconventionals Middle East water nexus and currency uncertainties, subsidies dynamics framework and energy efficiency talent Russia corruption innovative all of which affect the energy sector. As ccs regulation nuclear because many poor households still US policy the country highly depends on import of capital trade barriers use wood for their cooking purposes. electric markets energy storage natural gas, oil and coal, weakening regional poverty EU to be also addressed interconnection This issue needs renewable cohesion energy India Rupee (i.e. currency uncertainty) energies smart in terms of both CO2 commodity emission and affordability large grids prices is quite an important issue because it scale energy efficiency aspects. large scale hydro Brazil accidents biofuelsaffects energy prices. sustainable
uncertainty
Indias Critical Agenda
Though being positioned at lower Business impact, less uncertain because of local cycle weak oppositions to project, large scale signals hydro may require some actions to be considered as it is impact perceived as a viable solution to meet the energy needs in relatively environment friendly manner as compared to fossil fuel based power generation considering the immense hydro potential that India has.
global recession
energy cities efficiency
need for action
macro economic
vision & technology
26
Figure 13 National Map Indonesia
Figure 13 National Map Indonesia

World Energy Issues Monitor Indonesia, 2012
World Energy Issues Monitor 2013 World Energy Issues Monitor World Energy Council Indonesia, 2012
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innovative regulation
energy subsidies
ccs
UNCERTAINTY
hydrogen economy
terrorism
ccs
hydrogen economy
terrorism
currency uncertainty Russia
<< low
weak weak signals
Brazil
currency uncertainty Russia
large scale hydro business energy cycle global innovative unconventionals efficiency recession nuclear regulation climate China Middle East electric trade commodity dynamics framework corruption India storage barriers prices electric large scale accidents large scale hydro biofuels business vehicles energy global smart cycle capital renewable sustainable unconventionals efficiency recession grids nuclear energies markets cities climate China Middle East energy energy electric framework US policy corruption India dynamics poverty regionalstoragewater energy electric large scale accidents interconnection nexus vehicles affordability smart renewable capital sustainable grids talent energies markets cities energy energy US policy water regional poverty EU energy interconnection nexus cohesion affordability biofuels
commodity prices
trade barriers
critical uncertainties energy energy

subsidies
prices
high >>
energy prices
need for action
talent
EU cohesion
signals
need for action

vision & technology
Brazil
impact
impact
macro economic
World Energy Issues Monitor Indonesia, 2012
macro economic
vision & technology
4.4
critical transportation, storage site, technical uncertainties availability of enhanced oil recoveryenergy (EOR), subsidies Energy subsidy and energy pricing are risk monitoring, or financial framework, etc. innovative perceived as two most critical, underlying with specific timeframe to be defined for regulation issues facing Indonesia's energy landscape. each stage of the pilot development. As for energy trade commodity prices barriers prices Numerous studies and assessments clearly scale hydro Nuclear, it would be large necessary to improve biofuels business energy cycle global unconventionals efficiency have shown that the money spent on recession public understanding and acceptance of ccs nuclear climate China Middle East electric subsidies could have been far more nuclear technology, including its costs and corruption framework India dynamics storage electric large scale accidents productively spent on infrastructure as hydrogen risks. vehiclesThe promotion of energy efficiency for smart economy renewable capital sustainable shown by terrorism the public call to grids divert subsidy both and demand sides has been energies markets cities supply energy energy US policy budget into public service and regional energy water more acknowledged poverty in this years issue map energy interconnection nexus currency affordability infrastructure. It seems it would be difficult to survey than previously. uncertainty talent need for change the current practices of the subsidies action Russia EU Since renewable energies, energy poverty as it has beenBrazil met with political opposition. cohesion and energy affordability are all found in the Consequently the countrys challenges have weak action areas of the map, there should be been to expand their reliable energy signals stronger actions showcase energy macro to geopolitics business that vision & impact infrastructure for sufficient, secure and economic & regional environment technology subsidies have such adverse impacts on affordable energy supply. them. With proper budget allocation, there As for CCS, even though not much progress would be more secure source of energy has been made despite supply resources including new and renewable energy growth and more reliable Indonesias strong support of CCS to be power grid systems development. included in the Clean Development Mechanism, a pilot project and its roadmap are strongly needed as a necessary early step for development. The roadmap should provide broad guidance such as capture site,
Indonesias Critical Agenda
uncertainty
27
14 Monitor 2013 WorldFigure Energy Issues
National Map South Africa
World Energy Issues Monitor South Africa, 2012
Figure 14 National Map South Africa

World Energy Issues Monitor hydrogen South Africa, 2012
economy
framework critical uncertainties climate
27
terrorism
terrorism
weak weak signals signals
electric nuclear storage electric ccs climate vehicles framework Innovative unconventionals currency Russia energy regulation renewable uncertainty subsidies energy smart energies large scale electric prices nuclear grids hydro storage biofuels large scale electric sustainable China Middle East ccs accidents regional vehicles global cities energy India dynamics Business interconnection recession water currency Russia energy cycle nexus renewable uncertainty commodity subsidies energy smart energies large scale prices prices trade barriers grids energy hydro energy biofuels large scale sustainable affordability China Middle East efficiency accidents EU US policy capital regional global cities talent energy India corruption dynamics cohesion Business interconnection markets recession water cycle nexus commodity Brazil energy prices trade barriers energy energy poverty affordability efficiency need for EU US policy capital talent corruption cohesion markets action
Brazil
Innovative regulation hydrogen economy
unconventionals
need for action
impact
energy poverty
macro economic
vision & technology
impact
World Energy Issues Monitor South Africa, 2012
macro economic
vision & technology
4.5
are unrealistically optimistic in the context of the poor performance on climate framework Innovative energy security and energy equity. unconventionals The Republic of South Africa (RSA) regulation Furthermore, such strategies are likely electric has a fragile electricity supply system nuclear storage to cause a reduction in coal mining electric ccs 8GW coal fired power and is building vehicles with a consequent reduction in jobs, currency stations Russia to alleviate uncertainty the problem. energy subsidies energy further worsening therenewable unemployment smart energies scale prices However, these projects are running large grids hydro biofuels large scale issue. sustainable China Middle East accidents behind schedule. In parallel, the regional terrorism global cities energy India dynamics Business interconnection recession water government process to introduce wind, cycle nexus commodity About the critical uncertainties, climate prices solar and concentrated solar power trade barriers energy energy framework is very topical because the affordability efficiency need for EU by independent (CSP) provided power US policy capital talent corruption cohesion government is considering introducing markets action producers (IPP) to the market is also a carbon tax, which mechanism is energy running very late.Brazil poverty weak uncertain. Unconventionals are signals important because there has been a Electricity prices are impact rising sharply to macro geopolitics business vision & moratorium economic on the exploration for & regional environment technology support the new build, and the global shale gas and many court challenges recession including the slow recovery are expected when the moratorium has in the OECD countries is suppressing been lifted. Shale gas could be a game the demand for commodities, while changer for South Africa since there is liquid fuel prices are suffering from the no indigenous oil or natural gas. volatility and high levels in the global Electric storage is important because markets. They are having a negative of the fragile electricity supply system effect on the RSA economy. with the moves to introduce wind, solar Furthermore the government is and CSP to the energy mix. determined to deliver on carbon mitigation strategies that many believe
uncertainty
South Africas Critical Agenda
hydrogen economy
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In action areas of the issues map, the energy-water nexus is addressed as it is very much related to RSAs energy supply to achieve energy equity and energy security while at the same time RSA is already struggling to maintain security of water supply. This is also probably why biofuels are a low priority because their stress on water supply means they may never be a significant part of the RSA energy mix. Other issues in the action areas are renewables and China and India. In particular, the government in RSA is expected to facilitate the process of introducing wind, solar and CSP, otherwise it would threaten the necessary financial arrangement to materialize.
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Figure 15 Figure 15 National Map SWITZERLAND World Energy Issues Monitor National Map Switzerland Switzerland, 2012
World Energy Issues Monitor Switzerland, 2012
29
China India
China India nuclear
energy subsidies
energy subsidies
electric storage
terrorism commodity business prices cycle commodity business energy prices cycle Middle East dynamics biofuels energy affordability energy Brazil water Middle East dynamics biofuels energy affordability nexus weak Brazil water regional energy interconnection nexus corruption signals regional poverty energy interconnection corruption poverty
weak signals
US policy currency uncertainty US policy currency uncertainty
hydrogen EU economy cohesion ccs hydrogen EU electric economy cohesion vehicles

vehicles trade barriers
electric
ccs
Russia unconventionals global unconventionals recession

Russia
terrorism trade barriers
global sustainable recession capital markets cities capital largemarkets scale hydro large scale hydro sustainable cities talent talent
energy prices energy energy prices efficiency energy efficiency
climate electric nuclear framework storage innovative climate renewable regulation framework energies large scale innovative accidents regulation renewable energies large scale accidents smart grids smart grids
impact impact
World Energy Issues Monitor Switzerland, 2012
macro economic macro economic
geopolitics & regional geopolitics & regional
business vision & environment technology business vision & environment technology
4.6
In May 2011 only two months afterccs hydrogen Fukushima the Swiss Government economy drafted its Energy Strategy 2050, electric US policy vehicles currency which, for the moment being, is under uncertainty consideration of all stakeholders. A trade barriers terrorism final draft should be presented to weak Parliament in 2013 or early 2014. Most commodity signals business prices cycle probably, there will be a referendum, energy will accept or where the Swiss citizens Middle East dynamics biofuels energy affordability reject the and its legal Brazil strategy water nexus regional consequences. energy interconnection corruption Although the strategy contains some poverty important changes concerning the sectors mobility and heating and impact cooling, the main part is aimed at a rapid change in the electricity production. Switzerland until now has produced its electricity by and large without CO2-emissions, up to 60 per cent being hydro, up to 40 per cent nuclear. Unlike the German Energiewende, the Swiss strategy does not propose to close down the existing nuclear power plants, but to
uncertainty
Switzerlands Critical Agenda
abandon the planned construction of energy subsidies new ones. This meansChina toIndia develop energy efficiency measures and to electric nuclear foster electricity production by storage climate Russia renewables. It means also to rely in EU framework unconventionals cohesion part on gas-fired electricity innovativeproduction. regulation renewable The electricity grid has to getenergies smarter, global large scale recession accidents to be redesigned and strengthened. energy sustainable prices however, there are For the time being, capital markets cities energy little incentives to invest in the large scale smart efficiency talent hydro grids electricity sector. On this political background, the World need for Energy Issues Monitor for Switzerland action shows that nuclear and electric storage are important critical uncertainties as well as renewable energies. Furthermore as macro geopolitics business vision & Switzerlands economy is highly economic & regional environment technology export-oriented a reliable carbon price system and climate framework are also a predominant critical uncertainty. The issues of smart grids, energy efficiency, sustainable cities and large scale hydro being central elements for achieving the aims and
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vision of the Energy Strategy 2050, are considered as a need for action. Renewable energies together with energy subsidies remain listed under uncertainties, whereas the need for action for installing smart grids seems to be accepted today. There are only weak signals concerning regional interconnection. This is rather surprising, as regional interconnection is a condition for embedding electricity from renewable sources into the supply system and as the negotiations between Switzerland and the European Union on an agreement for the electricity sector are pending.
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5 Assessing the Global Agenda - Feedback from our Future Energy Leaders (FELs)
The climate framework and mitigating the negative impact of climate change are among the most critical uncertainties for the Future Energy Leader (FEL) community. This is unsurprising given the insolvency of on-going debates around a new Kyoto agreement and the lack of collective commitment from countries to address and tackle climate change issues. Future Energy Leaders pay much attention to the development of unconventional energy resources, renewables, and electric storage technologies. The development of these innovative technologies can be expensive and time consuming however; so there is some doubt as to whether they will ever replace conventional resources altogether and meet growing energy demands of the future. Future Energy Leaders place importance on global macroeconomic factors, the rise of energy prices and commodity prices that directly impact development of the energy industry. The FEL perspective shares a number of parallels with that of the Global Energy Leader. Both communities consider climate framework to be a fundamental global uncertainty. Fluctuating energy prices and the global recession are other key instabilities that
jeopardise development of the energy sector and feature in both maps. High growth rates in China and India have increased the demand for energy in the region which will significantly impact the global energy industry. The advent of unconventional resources such as shale oil & shale gas highlights the need for future investment in energy efficient technologies. Future Energy Leaders identify unconventional, renewables and energy storage technologies as critical issues and should therefore be understood as key drivers for the future. The Future Energy Leaders outlook suggests that immediate investment into energy efficient and energy saving technologies is necessary. Recognising and acknowledging such technologies as energy sources of the future will enable global populations to use energy effectively and provide consumers with a reliable, future energy supply at an affordable rate.
Figure 16 Global Map Future Energy Leaders
World Energy Issues Monitor Global, 2012, Future Energy Leaders
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climate framework Middle East dynamics renewable energies energy subsidies
uncertainty
EU cohesion
nuclear
smart grids
unconventionals energy prices global recession electric storage
terrorism biofuels
currency uncertainty business cycle trade sustainable cities barriers
US policy corruption talent
electric vehicles
capital markets
commodity prices
hydrogen economy
ccs
weak signals
Russia regional Brazil interconnection energy water nexus energy affordability large scale energy hydro poverty
China India
need for action

energy efficiency
impact
macro economic
vision & technology
World Energy Issues Monitor Global, 2012, Future Energy Leaders
critical uncertainties uncertainty

Middle East dynamics renewable energies energy subsidies terrorism biofuels currency uncertainty business cycle trade sustainable cities barriers electric vehicles talent large scale accidents commodity prices
climate framework
EU cohesion
nuclear
smart grids
unconventionals energy prices global recession electric storage
US policy corruption
capital markets
hydrogen economy
ccs
weak signals
Russia regional Brazil energy interconnection water nexus energy affordability large scale energy hydro poverty
China India
need for action

energy efficiency
impact
macro economic
vision & technology
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Project Participation
Project Team
Christoph Frei John Bourne Ori Chandler Latsoucab Fall Masato Komiya J. K. Mehta Paul Mollet Pablo Muls del Pozo Stuart Neil Catriona Nurse Gloria Pia Dan Rieser Slav Slavov Greg Schmidt Barry Worthington
Special thanks to the regional vice chairs of WEC for assessing the regional energy agenda FEL Advisory Board
Anna Illarionova Mrinal Madhav
Special thanks to the following Member Committees for country level deep dive
Colombia Germany India Indonesia South Africa Switzerland
Thanks to the many energy leaders and The also many energy leaders and policymakers kindly gave their insights policymakerswho who kindly gave their and expertise an anonymous basis. insights and on expertise on an anonymous basis.
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35
Member committees of the World Energy Council

Albania Algeria Argentina Austria Belgium Bolivia Botswana Brazil Bulgaria Cameroon Canada Chad China Colombia Congo (Democratic Republic) Cte d'Ivoire Croatia Cyprus Czech Republic Denmark Egypt (Arab Republic) Estonia Ethiopia Finland France Gabon Germany Ghana Greece Hong Kong, China Hungary Iceland India Indonesia Iran (Islamic Republic) Ireland Israel Italy Japan Jordan Kazakhstan Kenya Korea (Republic) Kuwait Latvia Lebanon Libya/GSPLAJ Lithuania Luxembourg Macedonia (Republic) Mexico Monaco Morocco Namibia Nepal Netherlands New Zealand Niger Nigeria Pakistan Paraguay Peru Philippines Poland Portugal Qatar Romania Russian Federation Saudi Arabia Senegal Serbia Slovakia Slovenia South Africa Spain Sri Lanka Swaziland Sweden Switzerland Syria (Arab Republic) Taiwan, China Tanzania Thailand Trinidad & Tobago Tunisia Turkey Ukraine United Arab Emirates United Kingdom United States Uruguay Zimbabwe
World Energy Council Regency House 1-4 Warwick Street London W1B 5LT United Kingdom T (+44) 20 7734 5996 F (+44) 20 7734 5926 E info@worldenergy.org www.worldenergy.org
For sustainable energy. ISBN: 978 0 946121 20 5
The World Energy Council (WEC) 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, WEC 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. WEC 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 worlds energy policy dialogue. Further details at www.worldenergy.org and @WECouncil

2013 World Energy Issues Monitor Report Feb2013

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2013 World Energy Issues Monitor Report Feb2013

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For sustainable energy.

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

World Energy Council

World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor World Energy Council

climate recession framework

Global China India

corruption World Energy Issues Monitor Global, 2012

geopolitics & regional

business critical vision & environment technology uncertainties

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

World Energy Council

2 Assessing the Global Energy Agenda by Christoph Frei

World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor World Energy Council

Where Energy Leaders have changed their views most radically

2013 World Energy Issues Monitor

World Energy Council

Figure 2 Global Map Geographical Tracking

World Energy Issues Monitor Global, 2012

issues tracking color: climate framework energy water nexus

critical OECD Asia uncertainties

Africa Europe LatAm Africa Asia

energy water nexus

need for action

weak weak signals signals

energy water nexus

World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor World Energy Council

issues tracking color: ccs energy efficiency

renewable energies issues tracking color: unconventionals ccs

2009 ccs 2011

2010 2011 2010

2011 2009 energy

energy 2009 2010 efficiency

weak signals impact impact

need for action action

World Energy Issues Monitor Global, 2012

Climate framework uncertainty CCS/CCUS Renewables or energy efficiency Unconventionals

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor

World Energy Council

World Energy Council

2013 World Energy Issues Monitor

2013 World Energy Issues Monitor World Energy Council

4 10Figure Regional Map Africa

World Energy Issues Monitor Africa, 2012

Figure 4 Regional Maps - Africa

US policy currency uncertainty ccs

business cycle energy subsidies

large scale accidents

biofuels smart grids