WORLD ENERGY LEADERS' DIALOGUE. Opening Session: Trilemma challenges: The need for an inclusive governance

Transcription

1 WORLD ENERGY LEADERS' DIALOGUE Opening Session: Trilemma challenges: The need for an inclusive governance Marie-José Nadeau, Chair, World Energy Council 21 January 2014 Abu Dhabi, United Arab Emirates

2 Balancing a policy framework that simultaneously delivers secure, affordable and environmentally sustainable energy - a sustainable energy system - is one of the most important challenges facing governments today. This triple challenge is known as the "Energy Trilemma". Each of the three legs of the trilemma is vital to the economic and social development of a country. WEC's Energy Sustainability Index comparatively ranks countries in terms of their ability to provide a secure, affordable and environmentally sustainable energy system. It illustrates the tradeoffs that exist with the Energy Trilemma and points to key areas that countries must give extra attention to in order to further develop a balanced energy profile and minimize the uncertainties and risks associated with an unbalanced energy approach. 1

3 What are the critical challenges to balancing energy security, environmental and social objectives, with a view to securing the required investment in energy infrastructure? Which are the particular success stories of balancing the energy trilemma? Good Morning. I would like to thank Minister al-mazrouei for his kind words and especially for inviting the World Energy Council to co-organise this event. I am sure that it marks the beginning of a fruitful and long-term relationship. Christoph has given us an excellent outline of the Trilemma paradigm; how WEC sees the world of energy underpinned by three pillars energy access, energy security and environmental mitigation. Each country faces its own Trilemma challenges and today, I would like to limit my comments to an important underlying 2

4 issue that is true for every nation and without which any discussion of the energy Trilemma is incomplete. This is the question of energy governance: because the Trilemma challenges cannot be tackled unless there is an inclusive governance process and structure in place. Governance in the energy sector is a complex issue. Each country has its own governance structure in line with its domestic reality and political context. It typically involves a large number of entities including but not limited to government departments, regulatory agencies, consumer organizations and the corporations - public and private - producing, transmitting and distributing energy. 3

5 What is important is that the governance structure in place be open, transparent and that it recognizes the long term nature of energy investments. Good governance goes hand-in-hand with a good investment grade. Simply put, without good governance, capital will be shy and walk away. At this stage, I would like to point out a figure cited last week by Christiana Figueres, the head of the IPCC; she outlined that the world needs investments to the tune of 1 trillion dollars a year in clean energy technologies if we are to limit to 2 degrees Celsius the rise in global temperature by For investments of this amplitude to be undertaken, clear signals are needed on governance related issues such as financial predictability, stable regulatory frameworks and functioning markets. 4

6 One trillion dollars a year is a huge amount of money to be guaranteed and the most important guarantee after economic fundamentals is that of good governance. Of course, good governance is not enough if the policies that arise are ill-conceived. Unfortunately, in many countries, the political forces that drive energy policies are focussed on short-term concerns rather than long-term imperatives. Increasingly, energy policies are being introduced with the aim to seduce the voter. Immediate cuts in rates or absolute targets for individual technologies are good examples of shorttermism, at the expense of long-term policies aimed at delivering reliable, affordable and sustainable energy supplies. 5

7 Mr Minister: Let me relieve your shoulders of the pressure you may feel. The UAE is a good example that bucks this trend with its focus on a diversified energy mix and long term targets. And for one, you are well aware of the time span between the conception and the commissioning of a large energy infrastructure such as the 5,600 megawatts nuclear plant currently being built in the UAE. Each country must develop its energy roadmap and set out clearly the objectives and how these objectives will be achieved. The Trilemma provides an excellent framework to develop such policies. Together with WEC's Energy Sustainability Index, it facilitates the identification of key areas to be developed in order to reach a balanced energy profile. Good governance and well-designed policies are critical to our energy future. 6

8 With this as a background for the up-coming discussion, I would turn the floor to Secretary General Christoph Frei and wish you and the panellists an interesting and forward-looking conversation. 7