Political willpower in setting the right policy will determine the long term future of global renewables. That was the message given to the World Future Energy Summit in Abu Dhabi by the IEA’s chief economist Fatih Birol.
Reiterating the message he told ELN on Tuesday (See our story “Research claims essential future role of renewables Jan 19th), Dr Birol said regulation and policy frameworks would be the biggest threat to a worldwide increase in renewables.
“The main challenge from the economic crisis is over but full recovery is threatened by the lack of equilibrium between the cost and supply of oil,” said Dr Birol.
Dr. Birol predicted that investment in renewable energy is set to triple between 2008 and 2035, mainly driven by the demand for power generation, but that the current glut of cheap gas and government fuel subsidies for generating power poses a threat.
“High oil prices are a key risk to the fragile economic recovery among developed nations. Government subsidies of energy fuels leads to inefficiencies and waste through artificially high use. Coupled with the current gas glut this poses a real threat to future investment in renewables.”
He added, “One of the key drivers to seeing growth in renewable energy will be government support and the sector needs $6 trillion investment from China, EU and UK through to 2035.”
While these threats exist, Birol added that costs for renewable energy development are falling due to huge demand from China: “China’s drive for low-carbon energy is helping with economies of scale and we may see China dominating clean energy technology which will have a huge impact on western economies, especially in the automotive sector.”
Also speaking at the conference was Lord Nicholas Stern of the LSE and the man who wrote a report for the Blair government in 2006 which is the bedrock of UK policy. He said the world should see renewable power as springboard for a global manufacturing revolution.
“In order that climate change targets can be achieved, we face the need for a new industrial revolution. That revolution needs policy change as a driver to reach the scale of change required. With fundamentally strong policy, we can also increase the pace of that change.”
Today’s speeches mark the last day of the World Future Energy Summit 2011 which began on Monday and attracted 25,000 visitors.