Industrial users will ‘bear the brunt’ to cut carbon

Industrial users will have to take the heat to achieve increased carbon reductions in the coming years as Governments around the world struggle to do so. That’s according to a […]

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By Priyanka Shrestha

Industrial users will have to take the heat to achieve increased carbon reductions in the coming years as Governments around the world struggle to do so.

That’s according to a new white paper by Schneider Electric Professional Services, which looked at the five global trends shaping the future of energy.

It suggested “harsh lessons” from the European carbon market should benefit new developers for future emissions schemes. According to the report, the EU’s Emissions Trading Scheme (EU ETS) went through “unexpected challenges and obstacles.”

Launched in 2005 as part of a ‘cap and trade’ approach to cut emissions of the 27 member countries of the EU, prices fell to virtually zero two years later at the end of the first phase. The second phase was more successful, however, prices tumbled again in the latter years, which drove down demand.

The report has predicted global energy demand to grow by a third in the next two decades, however, it is expected to remain “relatively flat” in developing nations. Population growth and the increasing availability of electric power could be the factors influencing demand on a global scale, according to Schneider Electric.

It also claims the US is set to have an increasing impact on the global market in the next few years as Liquefied Natural Gas (LNG) exports will be a viable option from the US by 2016. The development of the exports is expected to help lower the cost of natural gas on a global scale, however, it could push domestic prices higher for newer exporting nations such as the US.

The white paper has also predicted electric power prices will be increasingly volatile as renewable energy generation capacity grows in global markets. It claims world generation capacity in 2010 had risen 23% in the preceding five years, of which 34% were renewable sources such as wind and solar power.