Presented at the Asia-Pacific Energy Leaders’ Summit in New Zealand the early findings of a new report, ‘The road to resilience – managing the risks of the energy-water-food nexus’ from the World Energy Council is calling for immediate action in order to secure resilient energy infrastructure. Supported by a task force of over 140 experts from across the world, the report makes five recommendations:
Improve understanding of the water footprint of energy technologies in order to mitigate the risks of stranded assets
Account for the ‘price’ of water, particularly in areas of water stress
Consider a wider range of financial and insurance instruments to hedge short term risks such as adverse weather incidents and associated electricity price volatility
Give investors the confidence to invest by providing them a full risk assessment that includes different climate and hydrological scenarios in financial analyses
Provide a reliable and transparent regulatory and legal framework that takes into account water issues and competing stakeholders’ interest.
“If we are to counter the problems of water access, then cross-border co-operation is vital. We should be taking full advantage of the 261 international trans-boundary basins that cover 45% of the earth’s land surface. Energy resilience can only be achieved by moving from individual to joint efforts.”
Christoph Frei added:
“To promote infrastructure resilience, policymakers and investors need to create a framework which provides the incentives for adapted infrastructure design and needed financing mechanisms.”
‘The road to resilience – managing the risks of the energy-water-food nexus’ will inform our support for the work of the Asia Pacific Economic Cooperation (APEC) Energy Working Group. The report is the second in a series of reports that assesses the financing of resilient energy infrastructure and identifies the investment and systemic changes required to combat new emerging risks including extreme weather, the energy-water-food nexus and cyber risks.
The reports are prepared with project partners Swiss Re Corporate Solutions and Marsh & McLennan Companies with insights from the European Bank for Reconstruction and Development and will build to provide a detailed report ahead of the 23rd World Energy Congress to be held in Istanbul, Turkey in October 2016.