Energy Architecture in Transition
The first definition of “transition” in Webster’s Dictionary is “passage from one state, stage, subject or place to another.” So it’s not difficult to apply this term to the current situation in the world energy order.
One of the key drivers of this transformation is certainly climate change, a global energy challenge that doesn’t just affect the environment, but also has social, technological, economic and political dimensions. The target of limiting global warming to below 2ºC by the year 2100 set out in the new Paris Agreement marks this transitional agenda, which must focus on lowering our economy’s energy intensity, increasing efficiency and lowering carbon intensity through the gradual incorporation of clean energy sources.
To ensure these targets are met, the structural changes that must be made by advanced and emerging economies as well as the energy industry itself (on the supply side), not to mention the transport industry (among others on the demand side), call for well-prepared roadmaps for this transition, as well as sensible and technologically feasible energy and industry policies accompanied by coherent regulatory frameworks.
This year, we were thrilled to watch the extraordinary reduction in wind and especially photovoltaic energy prices at international auctions. Regulation paved the way, but it was technology and the market that drove this reduction. Far in the distance, we are beginning to glimpse the vision of complete decarbonization of the primary production of electricity. And this means that priorities are changing. From now on, the discussion will be about integrating renewables into the system without losing any of the firmness and flexibility of the current electricity mix. New technologies (storage, smart networks, etc.) and new markets will have to be addressed by revamped regulations. For example, in the European renewable energy industry, economies of localization and scale and the impact of the regulatory framework on costs make it advisable to take a geopolitical approach and maintain a geographic separation between the site of production and the site of consumption. In this context, it is necessary to promote and discuss the advantages of creating intra-European and extra-European logistics and institutional structures within the framework of the planned Energy Union while bearing in mind one unanticipated new factor: Brexit.
But we shouldn’t lose perspective. More than half of carbon emissions do not come from electricity production. Transport demands our full attention and the challenge it represents should not be simplified. It must be approached from different angles with a full understanding of its complexity.
Other high-impact issues in the context of this transition include the drop in global energy prices, particularly due to falling oil prices, and the future role of hydrocarbons. Ongoing discussion is clearly needed about the situation (or possible structural change) of the system used to determine the prices of the world’s energy supply. Oil will remain indispensable as an energy vector for road, air and maritime transport of goods and people for a long time to come. However, natural gas is being called upon to play an increasingly important role in the transition process towards a decarbonized matrix, given that it is a more hydrogenated vector and therefore generates fewer emission units.
Not to be overlooked in this discussion is the fact that taxation linked to the use of fossil fuels is a determining factor. In fact, one of the main distorting elements hindering the goals of decarbonization are the weighty subsidies granted for the most part in non-OECD countries.
In short, the 14th Energy Industry Meeting, which features the theme Energy Architecture in Transition and is organized with Deloitte, seeks to reflect on how best to tackle the transformation of the energy system. To achieve this, relevant figures from the business world, experts and academics, along with energy policy makers and regulators at the Spanish, European and global level, will provide a coherent, well-ordered analysis of the topics that are shaping the global energy transition.
Panels and Roundtable Discussions
The Meeting will be structured around the following topics:
• Transmission channels and incentives for fast and efficient decarbonization of energy.
• Technology, regulations and markets as the drivers of renewables in the world.
• The diversity of energy policies in today’s physically and institutionally connected Europe.
• Transport and efficiency policies as essential tools for good energy and environmental policies.
• Essential and accessory attributes of the optimal Spanish energy policy: a holistic vision.
• How long will hydrocarbons and carbon rule the world? Natural gas as a transitional energy source.
IESE Industry Meetings
- +34 93 253 64 68
Date and Venue
February 9, 2017
Camino del Cerro del Águila, 3
The conference languages are English and Spanish. Simultaneous translation will be provided into both languages.