"The World Energy Council’s Executive Assembly in Milan will be a major moment of the energy agenda, showing Italy’s leadership as it ranks amongst the top 13 countries balancing the Energy Trilemma"
The Council’s Secretary General speaks with QE
by Luca Tabasso
Rome | February 3, 2017
What does the Secretary General of the World Energy Council (the global organisation promoting affordable, stable an environmentally sensitive energy systems) think about Trump’s protectionism and the Brexit? The question is a must and Christoph Frei, whom is currently in Rome for two days of meetings with energy policymakers and industry leaders, is crystal clear: “According to our Energy Trilemma definition, everything that goes against integration is harmful because regional integration helps increase resilience and the efficient sharing of resources”.
In its latest World Energy Scenarios report presented last year (QE 12/10/16), the World Energy Council included – along its existing scenarios, “Modern Jazz” (market driven) and “Unfinished Symphony” (global orchestration with governmental intervention) – a third perspective named “Hard Rock”, which shows a fragmented world and lack of international cooperation.
“Until just a few months ago, nobody believed that such a scenario would have been possible” Frei explains, considering the “Hard Rock” scenario is the less desirable amongst the three Council’s scenarios. “If we shut ourselves down with a protectionist and fragmented behavior, we destroy knowledge sharing and slow down technological innovation. We increase the use of regional resources, such as renewables, but with less efficient technologies, or develop nuclear with an increasing risk on safety, or rely on coal with more pollution”. Therefore, “Hard Rock” is “the most expensive, riskier and dirtier scenario”.
Could this scenario already begin taking shape during the Energy G7 taking place in Rome next April? Perhaps, says the Council’s Secretary General, but it is necessary to consider that the energy sector was somehow interconnected even during the Cold War: “At that time it was very difficult to communicate but it was possible to work together at the technological level, an approach that is becoming crucial today again to face protectionist and fragmented attitudes”. For instance, “the agreements between Italy and the USSR were reached on the practical basis of commercial and technological convenience”. Furthermore, the entrepreneurial world can also move independently – that is without intergovernmental cooperation or public incentives – with appealing results, as shown in the “Modern Jazz” scenario. However, “there are some issues that could not be solved at a country level including climate change, security of supply and protection against cyber-attacks: even in a fragmented world, the international agenda deals with several problems that need to be faced together”.
The World Energy Council Executive Assembly to be held from the 8 to 11 October 2018 in Milan will take place in a complex moment for the energy sector. “Right now we are moving from a phase of fast growth in economy, population and energy, to a general slowdown, characterised by an acceleration in the decoupling of GDP, energy use and emissions, Frei explains, reminding how the OPEC itself has recently pointed out that the peak in oil demand will be reached in the next decade. After all, “we have hydrocarbons proven reserves whose exploitation would generate emissions for 2.800 bln of CO2, while the agreement to set a goal of limiting global warming to less than 2°C supposes a maximum emission of 1.000 bln tons”. Practically speaking, almost 2/3 of the resources cannot be utilised and could become “stranded resources”.
Italy will attend these forthcoming international events having what it takes: in fact, Italy is among the top 13 countries in the world (amongst over 150 countries ranked) that has been assigned a “triple A” score on the Energy Trilemma by the Council, recognising the sustainability of its national energy system based on security, equity and environmental sustainability criteria. During the 2018 World Energy Councils’ Executive Assembly, the focus will be on regional dialogue and integration – which from an Italian perspective translates into a “Euro-Mediterranean area and Africa dialogue “, as well as innovation, our country being well positioned when it comes to digitalisation, decentralisation, storage and cyber security.
Beware though, not to let your guard down, Frei advices: “To avoid going backwards, you need to constantly move forward and create new expertise; things change and if you stay still, you become at risk to be surpassed”.
Frei’s visit to Rome, occurred last Tuesday and Wednesday, and is part of series of initiatives led by the organization to widen the debate on policies and macro-trends of the energy transition with Italian institutions, as announced by the WEC Italia Chairman, Marco Margheri (QE 27/9/16). The Council’s Secretary General met with representatives of the Italian Ministry of Foreign Affairs and Economic Development and joined a meeting with the Presidents of the Chamber’s Committees on Environment and Productive Activities.