Outlook for 2013: Energy Markets and Policy (Part 1)

ImageIn a series of forward looking blog posts, we’ll take a look at some of the key energy trends to dominate to agenda in 2013. This will include: Energy Markets and Policy; Automotive; Mobile Devices and Battery Life; and Telecom Infrastructure. This week, we take a look at Energy Markets and Policy.

Global energy infrastructure is aging; much of it needs replacing and under extreme pressure from increasing demand. However, the cost of updating or replacing it is expensive, which calls for a smart approach to maximising existing and new infrastructure. To complicate matters, this approach needs to meet our vision of future energy needs, infrastructure capabilities, and as such, the energy mix.

Fossil fuels will dominate the energy markets for some time yet, but demand for renewable / alternative / clean energy sources will continue to grow. This transition to a new energy landscape will be a feature of the coming decades, as new technologies, energy infrastructure expansion, and tougher policy measures help to carve out a more sustainable energy mix. 

Infrastructure investment and policy decisions will define the environmental and energy security legacy of today’s political and business leaders.

  • In the US, a decision on the Keystone XL pipeline is likely to emerge early this year. The 2,000 mile long pipeline will be a $7bn infrastructure investment, creating over 20,000 jobs across the five states it runs through
  • Europe requires an estimated investment of EUR 200 billion within the next 10 years for the construction of gas pipelines and electricity grids.  Current investment levels are not enough to achieve this level of energy infrastructure modernisation.  In 2013, European leaders will vote on the much needed regulation to enable the trans-European energy infrastructure.  This will be a huge step towards energy supply stability across the region – one that will also create positive ripples for the European economy and jobs market
  • Governments and policy makers in Asia will increasingly embrace progressive national energy policies and encourage a drive towards greater energy efficiency.  The age of government subsidised, cheap energy will soon be behind us, as seen recently in India.  The Indian government reduced diesel subsidies in September 2012 – also sending a clear sign to the world that it is serious about fiscal consolidation, under the current economic climate.  The regional energy mix will also shift the balance in favour of energy from renewable sources – also in a bid to reduce CO2 emissions and pollution levels in some of the busiest cities in Asia
  • During the 1981-2011 period, China’s energy consumption increased by 5.82 per cent annually, underpinning the 10-per cent annual growth of the national economy.  China’s Energy Policy 2012 whitepaper (published in October 2012) lays clear a path of hi-tech infrastructure, low consumption of resources, light environmental pollution, sound economic returns, as well as energy security.  The Chinese leadership has actively stressed the role and development of hydropower, solar power and wind power generation within the energy mix by 2015.

Large-scale energy storage will also move into the spotlight, as foundations of a smarter connected energy infrastructure are laid in 2013 and beyond.  As we become more dependent on the connected conveniences offered by technology, demand for electricity will only increase. 

The important question is: in addition to the need to build new energy storage capabilities, can we exploit the existing infrastructure to help manage intelligent storage? 

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