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Critical issues affecting the energy sector

Hydrocarbon Engineering,


According to the 2014 World Energy Issues Monitor from the World Energy Council (WEC), high energy price volatility has for the first time replaced global climate framework as the number one critical uncertainty driving the world energy agenda.

Global climate framework uncertainty is still seen as a key uncertainty but is now perceived by energy leaders to have less impact than in the previous three years of the study. Carbon capture, utilisation and storage (CCUS) however, continues to be viewed as a technology with only a limited impact on the energy sector, continuing the clear trend over the past three years.

Energy price volatility

Energy price volatility goes beyond oil and gas prices and their regional differentials. It is also being influenced by US coal to gas substitution; increased coal use in Europe, which has driven up emissions; the collapse of solar module prices; and Australia redirecting its interest from North America to Asia while North American infrastructure companies are signing more deals with Asian consumers.

The study further finds that energy leaders are increasingly concerned about the sector’s ability to access the capital markets for funds towards energy infrastructure, when set against a continued recessionary backdrop.

Energy efficiency and renewables

Renewable energy and energy efficiency are continuing to keep energy leaders busy, with growth shifting from Europe and North America to the Middle East where demand is rapidly rising. Large hydropower has returned to the agenda with significant unrealised potential in Central Africa, Latin America, Russia and Canada.

In Africa, the top critical uncertainties are climate framework, high energy prices, and commodity prices. As a change from the last report, national governments and regional institutions are taking actions in energy efficiency and regional interconnection, while investment cooperation with China and India is viewed with increasing importance.

Top regional critical uncertainties

  • Africa: climate framework and commodity prices.
  • Asia: renewable energy.
  • Europe: global recession.
  • Latin America and The Caribbean: commodity prices and capital markets.
  • Middle East and North Africa: energy efficiency and renewable energy.
  • North America: nuclear energy and capital markets.

Adapted from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/18022014/critical_energy_issues/


 

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