The volatility in global energy prices exemplified by the recent plunge in the price of oil and the steadily falling cost of renewable electricity, is the biggest uncertainty facing policymakers today, according to the World Energy Council (WEC).
The global, UN-accredited energy industry thinktank, has highlighted price volatility as the biggest question mark facing policymakers in 2015 in the latest issue of the organization’s annual World Energy Issues Monitor publication, launched in Berlin.
Launching the report at the Handelsblatt annual Energy Industry conference, Christoph Frei, secretary-general of the WEC, cited the example of German major utility E.ON which is spinning off ist non-renewable generation assets into a separate company as illustrative of the new business models affecting the industry in large part thanks to the increasing uptake of solar and wind power.
The ministers and CEOs from more than 80 countries canvassed for the report named the doubts surrounding the outcome of the COP21 climate change conference in Paris in December as their second most critical uncertainty this year. The world awaits the outcome of the meeting of world leaders to discover whether a meaningful carbon price will emerge from a summit billed as the last chance to combat a global average temperature rise above the critical two-degrees centigrade threshhold.
Storage is a big uncertainty
According to the WEC report, the need for incentives to drive energy storage solutions has become a more pressing uncertainty for energy leaders this year, trading places with the need for energy finance in the critical uncertainty rankings.
The geopolitical uncertainty typified by the Russia-Ukraine conflict was cited as the fifth most critical question in 2015, and that particular stand-off dominated the fears of WEC members in Europe, ahead of the policy uncertainties afflicting the Continent’s nuclear industry.
The need for storage topped the concerns of North American energy leaders, ahead of the questions over energy policy in India and China, whilst energy efficiency policy uncertainty was cited by WEC respondents in the MENA region, behind question marks over coal and liquefied natural gas (LNG) across the Middle East and North Africa.
The need for investment capital dominated thinking in Latin America and the Caribbean ahead of question marks over LNG whilst energy subsidies and affordability topped the agenda in Africa, along with the need for finance.
The long shadow cast by the Fukushima nuclear reactor meltdown in Japan is still evident with Asian energy leaders citing large-scale energy accidents as the most critical uncertainty of 2015 in the region.