Energy price volatility tops world energy concerns
February 20, 2014 | By
Barbara Vergetis Lundin
High-energy price volatility has, for the first time, replaced global climate framework as the number one critical uncertainty driving the world energy agenda, according to the World Energy Council's (WEC) six-month study on the views of more than 800 energy leaders in 84 countries. Global climate framework uncertainty, while still key, is now perceived by energy leaders to have less impact than in the previous three years of WEC research on the subject. Meanwhile, carbon capture, utilization and storage (CCUS) continues to be viewed as a technology with only a limited impact on the energy sector -- a trend that has continued over the past three years. "The fact that both climate framework and CCUS are perceived to be issues of less impact is bad news, not only in terms of emissions mitigation, but also for the development of robust and resilient energy infrastructure," said Christoph Frei, WEC secretary general. "Our energy systems are in a state of massive expansion and transition, and the signals we see today provide clear evidence of the urgent need for more robust, coherent, long-term frameworks within which to plan and implement future investment." Energy price volatility goes beyond merely oil and gas prices and their regional differentials. It is also being influenced by the coal-to-gas substitution in the United States; the increasing use of coal in Europe, which has driven up emissions; the collapse of solar module prices; and Australia redirecting its interest from North America to Asia while North American infrastructure companies are signing more deals with Asian customers, according to the report. The WEC study further finds that energy leaders are increasingly concerned about the sector's ability to access the capital markets for funds towards energy infrastructure, when set against a continued recessionary backdrop. The WEC analysis reveals that the energy sector is reacting to short-term price signals while long-term signals remain absent. As the gap between energy access, energy security, and energy sustainability widens, the financial investments and technical efforts required to deliver simultaneously secure, affordable and environmentally sustainable energy will increase significantly. Long-term frameworks, therefore, emerge as the key to reaching energy goals. For more:
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