1. Time to get real – the agenda for change
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World Energy Trilemma
Time to get real – the agenda for change

2. The World Energy Trilemma
The Energy Sustainability Index
Public and private stakeholder dialogue
Agenda for Change

3. The World Energy Trilemma

4. The world is far away from achieving sustainable energy systems
1.2 billion people live without access to electricity
2.8 billion people lack access to clean cooking facilities
Population growth from 7 to 9.3 billion people by 2050
Energy demand is expected to increase between 27% and 61% by 2050
CO2 emissions continue to grow
Cumulative investment needed:
US$ 19.3 to US$ trillion by 2050 in electricity infrastructure alone

6. World Energy Trilemma Report
Policy review and analysis (deep dives)
Energy Sustainability Index
Call for increased dialogue
2012 report captured the views of more than 40 senior energy executives on what they need from policy
2013 report captured the response of more than 50 governments, multilateral organisations and development banks
Work culminated at World Energy Congress in Daegu in October 2013 and in the Agenda for Change

7. Energy Sustainability Index

8. The diversity of energy profiles among the top performers illustrates the importance of policy

9. Five profiles of the energy trilemma highlight common challenges
Illustrative members
Key strengths
Core Challenges
Pack Leaders
Switzerland, Denmark
Overall performance and balance
Ensuring achievement of 2020 climate targets
Fossil-fuelled
United Arab Emirates, Malaysia, Saudi Arabia
Affordability and security of energy
Energy and emission intensity challenges
Highly-industrialised
India, Mexico
Energy security and strong GDP growth
Rapid industrial growth and impacts
Hydro-powered
Brazil, Colombia
Use of renewables leads to low emissions and higher electrification rates
Improve energy access and affordability
Back of the Pack
Zimbabwe, Nicaragua
Not yet locked in to fossil fuel heavy development path
Investment challenges

10. The 2013 Index highlights an opportunity for developing countries

11. Public and private stakeholder dialogue

12. Develop a clear vision that encompasses a mix of energy sources and technologies 

13. In 2013 public decision makers agree with energy industry`s recommendations but point to an increasing policy complexity
Lack of global consensus on target profile of future energy system
Dynamics of changing energy supply and demand
Inherent difficulties in translating policy into effective regulations

14. To meet the complexity, public stakeholders ask energy industry to help
Improve energy policy and regulation through greater dialogue, sharing knowledge and experiences
Increase energy investments and R&D through better risk alignment
Support least-developed and developing economies on a new path to energy sustainability

15. Agenda for Change

17. hard choices in this generation to
“We must accept that we have to make
hard choices in this generation to
bring about real changes for
future generations and the
planet. Politicians and the
industry must get real.”

19. Back up

20. Recommendation 1: Define a coherent and predictable energy policy

21. Recommendation 2: Enable market conditions that attract long-term investments

22. Recommendation 3: Encourage public and private initiatives that foster R&D

23. Recommendation 1 Industry should proactively help improve energy policies and regulation
Inform and engage public
General Public
Politically achievability?
Industry
Industry -> Public
Policymakers need an engaged and well-informed public to build national consensus
Industry can help shift public support towards sustainability by educating public on cost of energy, new technology, and benefits of energy efficiency
Industry -> Government
Policymakers want industry to adopt a long-term perspective rather than bending to shareholder pressures for short-termism and buying into “flavor of the month” perspectives
Industry should share knowledge, insights and experiences to offset information asymmetry
Industry can help policymakers identify real needs of market and understand new technologies
Public -> Government
Public perspectives and sentiment on energy policy have significant effect on what can politically be achieved
“If you build on the national values and create a national consensus, politicians can come and go, but a clear message from the people remains”
Help policymakers through energy / technology expertise
Government

24. Recommendation 2: Increasing energy investment through better risk alignment
Policymakers agree it is their role to reduce political and regulatory risk…
…but call on industry to be less risk averse
Energy and infrastructure investments
Industry lead role in energy technology development and reducing costs
Form coalitions to align their research plans and long-term goals
Risks to investor
Ways to mitigate
Lack of transparency
Regulatory & policy risk
Country
risk
Working with development banks
Political risk insurance
“Uncertainty regarding the regulatory and economic framework surrounding energy systems does not support private investment”
WEC/Oliver Wyman survey found regulatory & policy risk and country risk to be two biggest risks negatively impacting energy investment
Policymakers acknowledge they need to provide stable legal and institutional framework that supports transparency
Stimulating investment without subsidies can help decrease mid to long-term uncertainty
Leveraging development banks and political risk insurance can help investors manage country risk

25. Recommendation 3: The new path to sustainability: an opportunity for developing countries
Support to government in four areas:
Creating attractive policy and regulatory frameworks
Generating opportunities for investment in “technically good projects”
Developing local human capital needed to establish and maintain an energy sector
Developing a path that recognizes the knowledge gap and sticks to locally adapting proven technology

26. United States on rank 40 Signs of progress
Total primary energy intensity improved continuously over the past years and is better than world average
Emission intensity improved even more in the same timeframe and is close to world average.
Further improvements are to be expected in the near future, e.g., coal replaced by gas, GHG and fuel efficiency standards and so on
2011
2012
2013
Trend
Score
Energy security 19 17 12 h A
Energy equity 1 g
Environmental sustainability 90 88 86 C
Overall rank and score 16 15
AAC

27. Energy sustainability balance Asia

28. Energy sustainability balance Europe

29. Energy sustainability balance Latin America and the Caribbean

30. Energy sustainability balance Middle East and North Africa

31. Energy sustainability balance North America

32. Energy sustainability balance Sub-Saharan Africa