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September 2015, New York: Special Summit on sustainable development in which world leaders continued driving the momentum achieved and work done since the adoption of the Millennium Development Goals. They also updated new proposals for world governance, including the goal to “ensure access to affordable, reliable, sustainable and modern energy for all.”
December 2015, Paris: Summit on Climate Change (COP21) in which the parties to the UN Framework Convention on Climate Change of 2015 negotiated a new international agreement on climate.
Following this highly intense multilateral and international agenda, IESE’s 13th Energy Industry Meeting, organized with Deloitte, will address a wide range of current topics. It will be held in Madrid on February 10, 2016.
We will analyze some of the points raised at the Climate Summit held recently in Paris: COP21 will mark a turning point in history. A global agreement was reached for the first time by Europe, the United States and Canada, along with emerging countries such as China and India.
One issue deserves special attention: the reduction of energy intensity as it is linked to economic growth. The successful decoupling of these two variables will have profound repercussions. More than half of primary energy demand is never used and a part of the energy that is used could be saved. This suggests considerable potential for reducing emissions without sacrificing the social well-being derived from access to energy. This paradigm confirms the fact that future primary energy demand in OECD countries will remain virtually stable: we would move from paradigmatic “peak supply” to disruptive “peak demand.”
Another matter of great importance is the reduction in energy prices around the world. Will it last? The debate will undoubtedly be renewed about the current situation and the variables in the complex system used to determine the price of world energy supply while naturally bearing in mind OPEC’s role and plummeting oil prices and all they entail. Meanwhile, the trend continues of bringing photovoltaics and onshore wind power into the club of conventional technologies. Renewable energies, which have joined traditional hydraulic, geothermal and bioenergy technologies, are gaining prominence in geopolitical discussions. Economies of localization and scale, together with the regulatory framework’s impact on costs, point to the need for the geographic separation of production and consumption. The intra-European and extra-European logistics and institutional structure will lead to major advances in terms of competitiveness, sustainability, safety and security.
We will also discuss universal access to energy and the elimination of many forms of poverty, both of which are still major challenges. The economic policies of emerging countries are driving down poverty rates like never before in history and, in such a context, guaranteeing affordable, sustainable energy for all will certainly be one of the most important global governance goals for decades to come. Recent technological findings have further expanded the list of solutions, such as the emergence of photovoltaic electricity and advances in competitive batteries as energy sources.
Finally, open debate continues on energy policies in the electricity sector. Electricity as a vector of consumption continues to gain importance, together with the gas vector, to the detriment of other vectors. The standard liberalized model so widely implemented internationally continues to be a topic of discussion. Moreover, smart grids and the growing prominence of intensive technologies with high capital costs and very low short-term marginal costs are making it necessary to rethink some essential aspects of the regulatory framework.