Global fragmentation and uncertainty pose obstacles to the energy transition – according to a report by World Energy Council
The World Energy Council's 2024 World Energy Issues Monitor report provides insights into the energy transition based on analysis conducted by nearly 1,800 energy leaders from over 100 countries.
Recently released, the report titled 'Redesigning Energy in 5D' delves into the energy transition analysis, drawing from surveys conducted in early 2024 after the conclusion of the COP28 energy conference in Dubai. It reveals that fragmented leadership within the global energy landscape is contributing to disorderly energy transitions, resulting in widespread uncertainty surrounding the transition process.
The survey respondents emphasized several factors contributing to this uncertainty, including conflicting global and regional geopolitical agendas, the expansion of energy security concerns to include critical minerals, demand-driven energy shocks and disruptions, and the diverse regional nature of climate action priorities. These factors collectively shape a highly uncertain path toward achieving net zero emissions.
To facilitate a smoother energy transition, the report outlines five key areas of change: decarbonization programs, digitalization initiatives, demand-side management strategies, diversification of energy sources, and a more decentralized approach to energy transitions. Additionally, it identifies the strengthening and expansion of transmission grids, flexible energy storage solutions, new policy and regulatory frameworks, and social inclusivity as globally recognized areas requiring focused attention and action.
Dr. Angela Wilkinson, Secretary-General and CEO of the World Energy Council, noted, "While the direction towards zero-emissions energy systems is clear, the journey to a sustainable future is fraught with challenges." She highlighted the global uncertainty surrounding the collective ability to manage clean and inclusive energy transitions effectively, particularly in the context of an increasingly fragmented energy leadership landscape and competitive geopolitics.
Among the global concerns highlighted in the report, volatile commodity prices emerged as a significant source of apprehension, with 34% of European respondents expressing extreme uncertainty in this area. Stakeholder communication and engagement to foster the development of renewable energy sources were deemed crucial, with 50% of respondents identifying it as an area of high impact. Additionally, a third of respondents, particularly from Europe and Asia, highlighted ongoing risks to peace and conflicts as significant drivers of uncertainty.
Looking ahead, the World Energy Council is gearing up for its 2024 World Energy Congress in Rotterdam, the Netherlands, where approximately 5,000 delegates and 18,000 attendees will convene to discuss transformative innovations and address critical issues facing the global energy sector.