Energy industry's challenges identified, agenda takes shape at WEC Montréal 2010

MONTREAL, Sept. 16 /PRNewswire/ - "The energy industry will follow a path of sustainable growth, aided by existing technologies and a pledge to improve communication with government and the public at national and international levels." This was the consensus conclusion drawn from presentations and panel discussions at the World Energy Congress 2010, which ended today. The Congress is held every three years and brings together industry leaders, consultants, government officials and politicians from around the world.

The Congress's concluding report, presented at the closing ceremony by World Energy Council Chairman Pierre Gadonneix, cited three achievements resulting from the four days:

    - A new agenda for the energy industry;
    - Identified the real constraints and opportunities faced in tackling the
      challenges of the coming decades;
    - Mapped the road ahead to adjusting energy policies and fostering
      international co-operation.

The New Agenda

The new agenda has an end goal of sustainable growth. At a time when all countries are working to develop strategies to put the financial crisis behind them, growth is a legitimate and worthwhile goal, Gadonneix said. "Growth accompanied by, energy accessibility and availability contribute concretely to improving the living standards of people."

According to Gadonneix, the industry must address three issues to achieve sustainable growth:

    - Security of supply: Investment must be made in new infrastructures to
      keep up with demand. The challenge has been made more difficult by the
      recent financial crisis and the recent surge in oil and commodity
      prices. Many developing countries spend about 4% of their gross
      domestic product on oil and gas imports, and in some cases as much as
      15%, he said.
    - Environmental protection and climate change: The energy sector, which
      is responsible for 60% of greenhouse gas emissions, is at the fore of
      the debate on climate change.
    - Inequalities within countries and across the globe: Inequality hinders
      economic development and depresses demand. The industry must tackle the
      problem of "energy poverty" that sees two billion people without
      adequate sources of energy.

Constraints and Opportunities

Technologies to help meet the challenges of sustainable development already are available. On the demand side, Gadonneix said that the industry must proceed quickly to invest in zero-emission buildings, smart buildings, and smart grids. On the supply side, while competitive technologies are available, development is needed in the areas of nuclear plants, carbon capture and storage, photovoltaic technologies, electricity storage and sustainable bio-fuels.

Gadonneix said that there are enough natural resources to meet demand, however there is a problem of uneven distribution across nations. Ensuring security of supply will lead to an increase in energy prices. Oil and gases are projected to last two more centuries, while coal will remain abundant for even longer. There is enough uranium to fuel nuclear power plants for 200 years. And there is tremendous potential for development or renewable energy sources such as hydroelectric, wind and solar power.

However, fossil fuel use is under pressure due to environmental concerns, and concerns over water and land use affect hydro and other energy sources. "The energy-water-food nexus is an important issue that will be addressed in WEC's future work, Gadonneix said.

"Innovation where policies, institutions and governance are concerned will be just as important as technological innovation," he said.

Policies and Governance

Gadonneix argued that markets alone cannot address all of the energy industry's issues. Public policies are needed, and they need to be established at both national and international levels. "We must find a new balance between market and regulation," he said.

WEC's Assessment of Energy and Climate Public Policies aims to identify fundamental principles to establish sound regulatory frameworks. "Energy players require long-term horizons. 2030-2050 is a much more relevant horizon than 2020," Gadonneix said. "Long-term policies are possible only if we keep costs in check. This will require planning the roll-out of different technologies, starting with those that are mature, while preparing others for the market. As for less mature technologies, the first step is to encourage and support research and development."

Norms and standards will play an important role as policies take shape, and energy pricing must encourage investment, he said. "WEC will promote the sharing of experiences on how to ensure the benefits of growth are equitably shared. Innovations like smart grids and smart homes can be catalysts in changing energy behaviours, and making people more aware of the value of our resources."

Individual countries' initiatives to create a system of sustainable energy must be made in a spirit of international co-operation, Gadonneix said. "While some were disappointed by the results of the Copenhagen Summit, we should not underestimate what was achieved. An agreement was reached through the unprecedented mobilisation of more than 140 countries - proof that we are now collectively aware of the issues at stake and willing to take action. Copenhagen created real global impetus."

Gadonneix warned that the financial crisis should not be used as an excuse to fall back on protectionism and isolationism. "We must design sound and effective public policies to deliver the mitigation objectives adopted by more than 70 countries in their commitments," he said. "We also must develop new tools to efficiently channel public and private funds and foster, among other things, technology transfer.

"Sustainable growth is no longer an option it is a necessity."

SOURCE WORLD ENERGY CONGRESS