WEC Congress highlights need for active Government policy and investment


 

The 22nd World Energy Congress was recently held in Daegu, Korea from 13 to 17 October. Under the theme of “Securing Tomorrow’s Energy Today,” this premier global energy forum provided the 25,000 participants with a high-level exclusive programme featuring addresses by government ministers, chief executives, and experts from around the world. The Congress hosted 250 speakers, including more than 50 ministers from nearly 70 countries.

This World Energy Council event marked the 90th anniversary of the world’s largest and most prestigious energy event. Running since 1924, the triennial World Energy Congress is the WEC’s global flagship event that enables dialogue among ministers, CEOs and industry experts on critical developments in the energy sector. Also known as “the energy Olympics,” the Congress is the world’s premier energy gathering. It offers a unique opportunity for participants to better understand energy issues and solutions from a global perspective. Hosted by the World Energy Council and the WEC Korean Member Committee, the 2013 event was organised by the WEC Daegu 2013 Organising Committee.

In one of the sessions focused on government policy and investments, Energy ministers from China, Russia, and Canada emphasised that proactive government policies and robust investment are key pillars in ensuring a steady supply of energy amid soaring global demand, while dealing with the “energy trilemma” of security, sustainability and access. Wang Yumin, Vice Administrator of China’s National Energy Administration, Russian Energy Minister Alexander Novak, and Canadian Minister of Natural Resources Joe Oliver each addressed delegates at the Congress about the so-called “energy trilemma” of security, sustainability, and affordability of world energy.

“China’s energy development challenges are dire,” said Wang Yumin, Vice Administrator of China’s National Energy Administration. “There are new challenges because new sources of demand are being created”. Wang said consumption is growing 5.8% annually in China when China needs to sustain 10% economic growth per year in order to realise the “Chinese dream” of stable development.

Wang said China had managed to provide rural heating to 70% of the rural population, and has used advanced turbines and other technology to disadvantaged groups. He pointed out that China’s energy efficiency is approaching 90%, but that the government would need to implement “strict measures” to keep energy consumption under control. “People’s lifestyles will have to change,” Wang said.

Russian Energy Minister Alexander Novak said “It is clear that the main component of the trilemma is energy security—unless it is guaranteed, all other good intentions fade into insignificance”. He said Russia will continue to raise the issue of global energy security at international forums such as APEC and G20 summits.

Novak said Russia will also propose ways of establishing a transnational energy infrastructure to service areas with energy production deficits. “This is of special relevance for the APR [Asia Pacific region],” Novak said, “as high economic growth rates and population increase bring about greater energy consumption”. Novak pointed out Russia is increasing the capacity of its Northern Sea Route to provide shorter and more productive routes for energy supplies.

Canadian Minister of Natural Resources Joe Oliver told delegates Canada is undergoing a series of economic reforms to streamline and cut red tape on major energy projects. “Expanding and diversifying our energy exports is a top priority of the Canadian government,” said Oliver. “Canada has an emerging LNG industry and a strategic imperative to become an important supplier of energy to Asia”.

The Minister also highlighted that about $650 billion in new investment is planned or underway over the coming decade in hundreds of major resource projects in Canada.

Increasing competition needed in SA’s energy sector

Meanwhile, in South Africa, the 20-year energy plan proposed by the Department of Energy in the draft of the Integrated Energy Planning Report was released earlier this year. It relies on big energy projects, and the building of another coal-fired power station, given South Africa’s rich coal deposits. All these proposals are expensive mega-projects requiring years of planning and litigation before construction can even begin.

One way to circumvent this challenge is to introduce a greater measure of competition into the energy sector and allow Independent Power Producers (IPPs) to generate and distribute electricity needed for the country’s national grid.

“But if South Africa is to meet its electricity demands in an environmentally sensitive way that increases the well-being of its citizens, it is going to have to go beyond simply weighing up dirty energy sources versus renewable technologies,” said Pierre Heistein, convener of UCT’s Applied Economics for Smart Decision Making course, in a recent article for Independent Online.

“A better strategy, and one that meets all the objectives, is to decentralise electricity production and open it up to the market. The department’s model needs to inspire innovation, not enforce reliance on the government. Already in the past two years, 2 500MW of electricity has been supplied by independent power producers who have built and funded their own infrastructure,” said Heistein.

Heistein proposes that Eskom adapts its role to become a distributor and intermediary in the market for electricity trade.
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