‘Renewable energies are developing rapidly. Today, they account for around 30% of the European Union’s (EU’s) electricity mix, and in the coming years we hope to reach 50%’, said Dominique Ristori, Director General for Energy of the European Commission, in his talk at the sixth edition of the Global Annual Energy Meeting, ‘The Coming Energy Market’. The event, which was held in the Bertelsmann Space, was jointly organised by ESADEgeo and the European Commission, with the collaboration of KIC InnoEnergy and BCG. ‘We aim to be global leaders in the energy transition. To achieve that goal, we must create regulatory frameworks that are both ambitious and stable with a market vision that goes beyond national borders. We must ensure both energy security and our competitiveness; embrace R&D and the implementation of new technologies; practice a governance that is conducive to our ability to achieve objectives through joint action at all levels; and work with a consistently involved citizenry’, he added.

‘In the EU, there is already real political support for our package of measures for the Energy Union, as the cost-effectiveness of renewable energies has become clear. We have shown that positive GDP growth is compatible with the development of an economy based on clean energy’, Ristori said. Additionally, since the conclusion of the Paris Agreement two years ago, ‘we have witnessed profound changes’. ‘In 2016, more than 33% of global investments were targeted at the renewable energy sector and energy efficiency’ and ‘some EU countries have already exceeded the goals for 2020, so the consumption of carbon-based fuels is likely to decline faster than predicted’, he noted. Ristori also stressed the ‘crucial importance of responding to the energy needs of emerging countries, in Asia and Africa, where the population is expected to grow exponentially until 2050’. ‘These needs must be met not tomorrow, but today, and to do that it is essential to advance in international cooperation based on mutual security, solidarity and trust’, he added.

In this regard, Javier Solana, president of ESADEgeo, acknowledged that climate change ‘remains a fundamental problem on a global scale that must be solved multilaterally’. This means ‘reaching agreements in the geopolitical terrain, where there is still resistance’ he added. Nevertheless, Solana sounded a positive note, affirming that ‘we will continue on the right path’.

Geopolitics of energy: China and the US

‘China and the US met in late 2014 to announce that they would both be making large contributions to the energy transition. However, under President Trump, US energy policy has changed dramatically. His strong support for fossil fuels and mistrust of multilateralism have major implications’, warned Samantha Gross, a fellow in the Cross-Brookings Initiative on Energy and Climate at the Brookings Institution. However, Gross noted, ‘although federal policy is headed in one direction, regional and local policy and global market and investment trends are headed in the other. Once the new technologies become cost-effective, they will be unstoppable’, she said. According to Gross, it must be remembered that this is a four-year term, so ‘[the Trump Administration’s] positions on energy issues are probably more harmful to the US than to the international community, in particular to trust and the US’s reputation as a partner’. In contrast, ‘China has understood that it is in its interest to tackle energy and climate issues, and it will fill in gaps that the US has left’, she concluded.

‘The New Silk Road initiative is essential to redesigning the global energy map and opening opportunities for sustainable economic, social and environmental growth’, said Shan Li, CEO of Silk Road Finance Corporation. ‘This economic development strategy, championed by the Chinese government, promotes market integration and greater connectivity in a region comprising some 65 countries – in Asia, the Middle East, Africa and Europe – that account for 70% of the global population and nearly 55% of global GDP.’ ‘Thirty-eight of these countries, many of them still dependent on fossil fuels such as coal, are responsible for the emission of more than half the world’s greenhouse gases’, he said. ‘The challenge of building a “Green Silk Road” requires establishing financial and political frameworks that encourage sustainable investment, with the support and collective effort of the international community’, Li continued.

Business outlook: fossil fuels

‘The fossil fuel market is facing an uncertain scenario. Everything seems to suggest that we will see peaks in demand in future’, warned Iván Martén, Senior Partner, Managing Director and Vice-Chairman for Energy Practice at BCG. To be able to meet that demand, ‘we need to understand the levers driving its increase’, he added. For Martén, ‘oil and natural gas are here to stay’, but ‘our industry still has to evolve, abandon traditional patterns in order to supply a more sustainable energy and increase our efficiency’. Ladislas Paszkiewicz, Director of Climate Strategy at Total, agreed, noting, ‘We are part of the problem, but we can also be part of the solution’. ‘Environmental responsibility must be balanced with the security of the energy supply: everything hinges on combining a reliable, clean and affordable energy supply with a reduction in our environmental footprint’, Paszkiewicz said. In this regard, Jaime Martín Juez, Director of Sustainability and Technology at Repsol, explained that his company has placed ‘green bonds on the financial market, which we intend to use to finance the reduction of emissions from our refineries’ and is part of the of the ‘green’ investment fund of the Oil & Gas Climate Initiative (OGCI), of which he is a member of the Executive Committee. According to Manuel Fernández Álvarez, Managing Director of Wholesale Energy Business at Gas Natural Fenosa, his company’s vision of the future has three main drivers: ‘decentralisation, digitalisation and decarbonisation’. The executives agreed on the need both for regulatory and investment frameworks that help to offset market distortions and to adapt their business models and embrace new development opportunities in areas such as carbon capture, electricity storage, internal combustion engine efficiency and shale gas.

The sixth edition of the Global Annual Energy Meeting, ‘The Coming Energy Market’, also featured talks by Angel Saz-Carranza, Director of ESADEgeo, Juergen Foecking, Deputy Head of the Representation of the European Commission in Spain, and Diego Pavía, CEO of KIC InnoEnergy.