WEC Montréal 2010: Pursuing Sustainability

Global population growth and the importance of limiting global warming mean energy policymaking has to accommodate multiple agendas – economic development, national security, social welfare and environmental protection. As a result, policy approaches to the national primary energy mix, infrastructure development, market operation and demand management need to be governed by principles relating to long-term energy sustainability.

The World Energy Council, in the interest of a sustainable energy future, and in partnership with Oliver Wyman, has developed a methodology taking into account the key dimensions of energy sustainability – energy security, social equity and environmental impact mitigation – thereby identifying effective polices around the world and examining how they can be transferred from one country to another.

The review of country policy frameworks and their implementation during the past 12 months have revealed a wide range of successful approaches.

In terms of fossil fuel-based energy security policies, China, Japan and Russia have effective, yet different, approaches to developing resource-oriented partnerships with other countries, based on strategic alliances, technological expertise and financial strength. U.S. technology investments have resulted in rapid advances in opening up new domestic natural gas resources through the hydraulic fracturing of deep shale and the ability to take advantage of that expertise overseas.

In terms of alternative energy supply, several regimes stand out. Using different policy approaches, Germany and Texas have made strong progress in the deployment of renewable energy within their transmission infrastructure. Brazil and Ghana have been particularly successful in using off-grid renewable energy to increase access to electricity for rural populations. France’s carefully planned approach to renewing and enhancing its nuclear capacity is a model for an established nuclear nation.

In terms of energy efficiency and demand- side management, Japan’s programs, directed largely at industry, have achieved significant reductions in consumption, while innovative schemes in Brazil have encouraged domestic manufacturers to develop low energy consumption appliances. Denmark provides a benchmark for building design standards, and California and Ontario are front-runners in the development of smart grids.

The world has reached a critical juncture for energy policymaking. Energy demand is rising from non-OECD (Organization for Economic Cooperation and Development) countries that are undergoing both rapid population growth and economic development, while domestic fossil fuel reserves are declining, and the remaining large-scale oil reserves are difficult to access. Strong measures are needed to mitigate the impacts of climate change. Much energy infrastructure in OECD countries needs to be renewed, while many non-OECD countries are still seeking to extend access to energy across their populations.

Both the recent economic downturn and the failure to reach a binding international consensus on reducing greenhouse gas emissions have impeded policy solutions to these issues.

Although the global f inancial crisis caused a dip in global energy consumption and a temporary stabilization of emissions, it also reduced the availability of investment capital and increased uncertainty about infrastructure project economics.

At this critical juncture in global policymaking, when hard choices have to be made and multiple benefits secured, there is great value in international dialogue around the pursuit of sustainable energy solutions. As its policy assessment work continues, the World Energy Council will look to facilitate such interactions among policymakers and the energy industry, hoping to deepen the current extensive exchange of ideas.