The “New Realities for Energy”: Peak Demand, Stranded Assets

“The world is undergoing a Grand Transition driven by a combination of factors including the fast-paced development of new technologies, an unstoppable digital revolution, global environmental challenges and changing growth and demographic patterns”, according to a statement from the World Energy Council, a UN-accredited global energy network with over 3,000 member organisations in over 90 countries.  According to the World Energy Council, the energy sector is faced with 7 “new realities”, including peak energy demand and a serious risk of stranded assets.

The World Energy Council, which published its statement on the first day of the World Energy Congresss in Istanbul (9-13 October), hosted by Turkish President Erdogan and visited by political and business leaders from across the world, including Russian President Vladimir Putin, sees 7 “new realities” for energy.  They are the following:

1. From Peak Oil to Peak Demand
   The new reality:  The peak oil debate belongs to the past:  the reality is that per capita demand for energy will peak before 2030. Energy intensity reductions supported by primary energy substitution effects are set to increase at a faster rate than the demand increase from a growing global middle class.  This therefore shifts the discussion from peak oil to peak demand with anticipated growth limited to only a 20% increase over the next 45 years.  This will have significant implications for energy companies in terms of their ability to achieve their growth expectations, which will need to be factored into investment strategies
2. Spending the Carbon Budget
3. From Stranded Assets to Stranded Resources
4. Shifting System Resilience
5. A Path of Innovation
6. Changing Global Governance
7. Entrepreneurship Driving Access for all
   The new reality:  Progress has been made, but we still have 1.1 billion people without access to energy.  The recognition of energy as the 7th development goal by the United Nations has provided additional focus on high impact opportunities as well as the rapid deployment of best technology solutions.  The recent rise of innovative and disruptive business models for rural off-grid power solutions is providing a formidable opportunity to places with greatest need in Sub-Saharan Africa or South Asia.  The roll-out of these solutions will define key entry points into tomorrow’s markets and are a great contribution to keep equity gaps from increasing.  Empowered trade and climate policy will be important for technology transfer to ensure the mistakes of the past are not repeated.  Robust policy and institutional frameworks are urgently needed to de-risk and support entrepreneurial approaches and enable them to access large scale investors.

Read more at The “New Realities for Energy”:  Peak Demand, Stranded Assets