Issues Map 2011

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In order to assess the global energy agenda and its evolution over time, the World Energy Council conducts an annual issues survey with the Chairs of its Member Committees who are ministers, CEOs and leading experts in over 90 countries. It includes views at both the global and regional levels.

Analysis - How to interpret the results?  In 2011, the critical uncertainties space is dominated by three major macroeconomic (in red) and geopolitical (in brown) issues.

• The absence of a global climate framework and the lack of progress towards a significant agreement between the big blocks is keeping this issue as the dominant critical uncertainty
  
• The "political spring" in the Middle East / North Africa region with its impact on Libyan oil supply has affected energy markets globally and  increased concerns over political instability
  
• Fukushima has pushed the nuclear renaissance from consensus into a much more uncertain position and taken together with the 2010 oil spill in the Gulf of Mexico, has put large scale accidents on the top of Energy Leaders' radar

In comparison to 2009, macroeconomic risks related to the financial / economic crisis have lost their dominance as a key concern for the energy sector. However, the crisis is still looming and issues including energy price volatility, commodity prices and capital market access remain in an alert position, similar to 2010.  Looking at the potential energy solutions that require immediate action (in green) four topics are on top of the agenda:

• Renewable Energies which remain a priority despite investors' prudence in a current economic climate
  
• Energy Efficiency which will require investment in capital, education and institutional frameworks to promote adequate behaviour and solutions
  
• The quartet of Smart Grid, Storage, Electric Vehicles and Sustainable Cities has been increasing in influence since 2009 and these are now in a solid position to play a significant role in energy developments
  
• Carbon capture and sequestration (CCS), with higher perceived impact the uncertainty has decreased. However, without a clear climate framework, CCS remains in a challenging position due to a lack of effective financing mechanisms and incentives to develop this technology beyond pilot

Hydrogen is not currently seen as playing a big role as a clean energy vector while the energy-water nexus is seen as rapidly growing in concern.

Overall it strikes that the very issues that in previous years were seen as a substantial part of the solution (energy efficiency, renewables, nuclear) are all taxed with higher uncertainties. The risks associated with these issues, ranging from physical accidents over regulatory to financial risks, have increased and have become a growing concern. This indicates that managing relevant risks will be an important part of the agenda going forward.

How to read the issues map: Issues with high uncertainty and high impact ("critical uncertainties" - in the upper right corner) include these, which will most benefit from multi-stakeholder dialogue and scenario analysis. The issues on the high-impact/low uncertainty side are these where immediate action finds easy consensus ("need for action" - bottom right). The low impact/low uncertainty ones include issues of perceived lesser importance but also "weak signals" (bottom left), which may be issues that are still badly understood. Further, the urgency of an issue is proportional to the size of its bubble. Finally, the four different categories of issues - macroeconomic risks, geopolitics, business environment and energy vision - are represented in four different colours