Policymakers across the globe must develop innovative investment policies and technologies to accelerate the low carbon energy transition.
That’s the recommendation of the World Energy Council (WEC) in its new report which will be presented to ministers at the seventh Clean Energy Ministerial (CEM7) in San Francisco today.
It identifies five focus areas to drive progress to tackle the energy trilemma of sustainability, security and energy access and meet the goals of 2020 and beyond.
Transforming energy supply: It suggests policy and decision makers must set clear and straightforward energy targets and provide clarity to the market. The process must include new entrants to the energy sector and early engagement with affected communities.
Advancing energy access: The WEC suggests increasing private sector investments in infrastructure expansion and modernisation and increase competitiveness in the power market. It urges nations to consider a variety of mechanisms to enable affordable access to power.
Christoph Frei, Secretary General of the WEC said: “Solely expanding infrastructure is not enough. Countries must look to a range of innovative mechanisms that enable access for people to utilise the benefits of modern energy for income-generating activities. Pay-as-you-go business models and mobile banking solutions to promote the take-up of renewable powered energy services are examples of such mechanisms.”
Addressing affordability: The WEC believes subsidies can be vital for lower income consumers in the short term however they “can be costly to deploy, are contentious to remove and tend to decrease overall performance on the energy trilemma” over the long term.
It points out that some governments are using technologies such as mobile phones or special banking accounts to ensure subsidies are targeted at those who need it the most.
Energy efficiency: The report states energy efficiency and managing energy demand continue to be globally perceived as top action priorities “with huge potential for improvement”.
However it adds cost savings alone are often insufficient to stimulate the adoption of energy efficiency.
It suggests policymakers to “align the interests of asset owners, users and regulators and continue to implement a combination of energy efficiency standards, performance ratings, labelling programmes and incentives”.
Decarbonisation: The WEC believes dynamic and flexible renewable energy investment policies are key to responding to evolving market dynamics and technological developments. It adds the climate goals set in Paris last December will require “a clear path to a meaningful carbon price signal” as well as changes beyond the energy sector and across the economy.