Decisive leadership needed in an uncertain energy era

Posted on 14 October 2013

Industry leaders gathered at the World Energy Congress agreed on 14 October that the energy environment is getting more and more complex and uncertain, and policy makers need to chart a course that ensures both affordability and sustainability.

Christoph Frei, Secretary General of the World Energy Council, pointed to post-Fukushima safety concerns and the collapsing price of solar energy in some regions as just two sources of uncertainty. “[US] shale gas emerged from nowhere to become a game changer,” he said. “It’s the complexity and speed with which these things arise that determines uncertainty.”

Leonhard Birnbaum, Vice Chair of Europe, WEC, said that he is less concerned about whether engineers can meet energy challenges than whether markets can distribute new forms of energy efficiently. “Markets can deliver if there is clear political leadership and a clear political framework,” he said. He described Europe as “over-defined” in terms of energy targets. “We need to reform renewable subsidy acts and reform the markets to set example for the world. If other countries don’t see an example in us, then we have failed.”

Michael Suess, Member of the Managing Board & CEO of Energy Sector, Siemens, agreed Europe has made some mistakes. “A subsidy is like a medicine – for a short period it is good. For a long period it makes you sick. In Europe, we completely collapsed the market system.”

Hur Dong-Soo, Chairman of South Korea’s GS Caltex, agreed government must lead the way in shaping the energy future. “Supply-based energy policies are not enough in curbing greenhouse gases and curbing energy costs – managing energy demand is the key to what appear to be contradictory goals – establishing a stable energy network and managing climate change.”

Zola Tsotsi, Chairperson of South Africa’s Eskom, challenged participants at the World Energy Congress to help set new models for financing energy projects in the developing world, where hundreds of millions of people remain without electricity. “In order to have universal access, you must make sure power is affordable to the whole population,” he said. “Developing country governments have a dual responsibility – for raising capital to invest in infrastructure, and to assist citizens by subsidizing the cost of power supply.”

Samantha Smith, Leader of the WWF’s Global Climate and Energy Initiative, reminded participants to keep the urgency of climate change in the front of their thinking. “If we don’t, our children can look forward to rising sea levels, more acid oceans, more extreme heat and precipitation events, and potentially more droughts.” She urged the world to both reduce energy demand and transition to renewable energy sources, warning harsher climate conditions will perpetuate inequality via food and water insecurity.

This news story is based on the Opening session, “Tomorrow’s energy: Connecting the dots”,  at the 2013 World Energy Congress.