Innovation and shift to a low-carbon energy market biggest issues facing the world’s energy leaders 

  • Innovation – in particular issues of storage, market design and climate resilience have become increasingly important drivers of change
  • Commodity prices and associated volatility have replaced energy prices as the number one critical uncertainty on the energy agenda for leaders and experts globally
  • Unconventionals have lost traction for industry leadership in the current price environment. However, the position of LNG remains stable.

Now in its seventh year, the World Energy Council’s annual survey of global energy leaders – the 2016 World Energy Issues Monitor– tracks the concerns of over 1000 global energy leaders. This year’s report identifies ‘A climate of innovation – responding to the commodity price storm’ and for the first time highlights the views of China’s energy leaders amongst the over 30 national deep dives in this pivotal study.

Launched in Beijing, the Chinese Issues Monitor reflects the direction of the 13th five year plan which will be formally adopted this month and runs from 2016-2020. The analysis also reflects the importance which the government has placed on the commitment which it made at COP21 in 2015.  As such, carbon reduction and lowering the carbon intensity of GDP is at the heart of the issues facing China’s energy leaders.

Christoph Frei, Secretary General of the World Energy Council said, “There is a climate of innovation amongst energy leaders across the world in response to the need to de-carbonise, the opportunities arising from decreasing renewables costs, and emerging new risks on the environmental and cyber fronts – and this in the midst of a commodity price storm.

“This year we see that industry leaders remain most concerned about commodity price volatility, global recession and climate framework uncertainty with new market design and electric storage featuring as new items of innovation focus. The quest to finance the transition to a more sustainable energy system remains an issue that keeps leaders busy at work, whilst there is a growing acknowledgement that adaptation to new resilience challenges, smart innovation and regional interconnection will be key parts of the solution.”

2016 World Issues Monitor - Global Key prioritiesAfter the Paris COP21 talks, the World Energy Issues Monitor shows that we are entering a period of transition in the energy sector where there are three powerful drivers that will influence change and result in different ways of thinking about infrastructure and critical system components. To navigate these transitions with limited resources defined by a sluggish growth context, investors and governments have to be very clear what their strengths and priorities are. The report says that the three key drivers of change will be:

  • Decarbonisation transition – a wide range of different new technologies are becoming a reality
  • Market design transition –  increasing shares of zero-marginal-cost energy from intermittent renewables in combination with the decentralisation of systems; increasing use of smart data, and decreasing entry barriers for new suppliers.
  • Resilience transition – the impact of extreme weather events, cyber security threats and the energy-water-food nexus.

How companies and industry can work together to facilitate a move to a low carbon economy will be a key theme at the 23rd World Energy Congress which takes place in Istanbul in October 2016. The report’s findings provide information to leaders and policymakers in nearly 100 countries and guide the structure for the discussions at the Congress.

Every year, the World Energy Council’s Issues Monitor gives an assessment of the issues impacting the global and regional energy sector based on the views of the World Energy Council’s energy leadership community. It identifies the key uncertainties while highlighting the areas where action is most required to enable the sustainable supply and use of energy.