© world energy council 2015 what price for sustainable, secure energy? joan macnaughton march 28,...

© World Energy Council 2015

What price for sustainable, secure energy?

Joan MacNaughton

March 28, 2015

Abu Dhabi, United Arab Emirates


Energy in the Middle East

► 66% of the world’s oil and 45% of the world’s natural gas reserves

► Electricity generation relies heavily on fossil fuels

► Generous subsidies

► Emission and energy intensity highest in the world

► Investment needs to 2035 close to US$4trn


Middle East investments needs to 2035

Oil

Gas

Coal

Power

Biofuels

Energy Efficiency

2014, IEA; World Energy Investment Outlook


Balancing the‘Energy Trilemma’

ENERGYEQUITY

ENVIRONMENTALSUSTAINABILITY


Trilemma profile Middle East and North Africa

GCC countriesAll MENANon-GCC countries

aybiLniarhaB

OmanMorocco

Yemen

Egypt

QatarIran

SaudiIsrael

Syria

JordanTunisia

Kuwait

United Arab Emirates Lebanon

Algeria

GCC countries Non-GCC countries

© World Energy Council 2015 6

United Arab Emirates on rank 35

2012 2013 2014 Trend Score

Energy security 56 49 47 h B

Energy equity 39 37 8 h A

Environmental sustainability 106 102 102 h D

Overall rank and score 53 44 35 h ABD


Energy Sustainability Index

Policy review and analysis (deep dives)Call for increased dialogue

2012 report views of 40 senior energy executives

2013 report response of governments, multilateral organisations and development banks

2014 report views of financial sector leaders as a follow up to Agenda for Change

World Energy Trilemma report


Clear vision with a mix of energy sources and technologies

Public andprivateinitiativesthat enableRD&D andinnovation

Coherentandpredictableenergy policy

Stableregulatoryand legalframework forlong-terminvestment


Increasing policy complexity

1. Lack of global consensus on target profile of future energy system

2. Dynamics of changing energy supply and demand

3. Inherent difficulties in translating policy into effective regulations


Help from energy industry

1. Greater dialogue, sharing knowledge and experiences

2. Better risk alignment

3. Economic development on a new path to energy sustainability


The World EnergyCouncil’s WorldEnergy Trilemma2012–2013 researchprogramme capturedthe insights of morethan 100 globalenergy leaders andled to the identificationof a 10-point agendato address threebroad policy areas.

10-POINTAGENDAFORCHANGE

Connect energytrilemma to the broadernational agenda1

Minimise policyand regulatory riskand ensure optimalrisk allocation

Drive (green) tradeliberalisation

Increaseengagement with thefinancial community

Provide leadershipto build consensus –nationally andglobally

Improve policy-maker andindustry dialogue

Market-basedapproaches tocarbon pricing todrive investments5

Design transparent,flexible anddynamic pricingframeworks6

7

8

4

Meet the need for moreresearch, developmentand demonstration (RD&D)

9

Encourage jointpre-commercial industryinitiatives, including earlylarge-scale demonstrationand deployment

10

2

3


Increased engagement with the financial community

1. There is enough money available if the right conditions are provided.

2. Policymakers must focus on implementing the policy frameworks to reduce political and regulatory risks.

3. The financial infrastructure must exist for capital to flow easily to the energy sector.

4. The energy sector must bring clearly bankable projects to the market.


The lack of a global climate framework is one of the greatest uncertainties globally


In the Middle East, uncertainty around the lack of a climate framework is high


What are the options for a climate framework

2o

goalWeak SPECTRUM OF AGREEMENTS Strong

A voluntary, non-binding

agreement with national

monitoring

A voluntary agreement, international review and monitoring

International agreement with binding targets, international monitoring and enforcement mechanisms


2015 Outlook

Challenges and opportunities for the

energy sector in adjusting energy supply and use to

meet post-2015 sustainability goals

Interviews Regional workshops National dialogues

Energy sector perspective to feed into international discussions on post-2015 goals


Investment needs to 2035

North America:

OECD Europe:

Eastern Europe/Eurasia: US$4.7

Middle East:

Latin America:

OECD Asia:

Non-OECD Asia:

Inter-regional transport:

Africa:

Oil

Gas

Coal

Power*

Biofuels

Efficiency

* Power includes generation, transmission and distribution

US$4.1

US$10.2

US$6.3

US$3.5

US$3.4

US$2.6

US$12.7

US$0.7

Source: IEA, World Energy Investment Outlook, 2014


Issues

► Long term investment in oil & gas must rise substantially in the Middle East

► Risk of stranded assets? Carbon capture and storage?

► Diversification

Policy framework – Coherence; clarity; energy pricing and use


What price for sustainable, secure energy?

Joan MacNaughton

March 28, 2015

Abu Dhabi, United Arab Emirates

© world energy council 2015 what price for sustainable, secure energy? joan macnaughton march 28,...

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