Electricity utilities see having a credible price level for CO2 and long-term, predictable policies as the crucial factors for driving change in their fuel and technology mix, according to the latest insights from the Global Electricity Initiative (GEI), presented today.
Despite important efforts to increase investments in renewables, the GEI utilities expect fossil fuels to continue to be the basis of generation capacity from 2015 to 2035. In addition, the price of CO2 must be predictable enough to bring a significant shift in utility investment and portfolio decisions towards low-carbon resources.
These are among the preliminary findings of the Global Electricity Initiative, a platform which is working with utilities to help increase electricity access and reduce carbon emissions.
Philippe Joubert, Executive Chair of the Global Electricity Initiative, said: “Currently there are too many uncertainties around carbon schemes and carbon prices. All too often the real cost of electricity generation and distribution is hidden behind subsides, unrealistic carbon prices, or other market-distorting schemes.”
“All utilities will have to continue to use the entire fuel mix, and they believe incorporating renewables into their generation mix is a must. The key to significant scale-up of renewables will continue to be their integration into the grid, with utilities seeing competitive storage technologies to be a critical game-changer.”
The GEI surveyed chief executives from electricity utilities worldwide covering 75% of global generation capacity and gauged their views at the recent World Energy Congress, the flagship event of the World Energy Council, the UN-accredited global energy body. All of the utilities surveyed report that CO2 pricing is a crucial factor.
The GEI utilities see land and water requirements for electricity generation to be growing concerns. All the utilities believe that adaptation is just as important as mitigation.
Philippe Joubert said: “Nature is already sending us clear signals. Climate change has triggered severe weather events, so mitigation is not enough. Our energy systems must be developed and adapted so that they will become more resilient.”
The Global Electricity Initiative is an alliance between the World Energy Council (WEC), the World Business Council for Sustainable Development (WBCSD), and the Global Sustainable Electricity Partnership (GSEP). The full results of the GEI will be unveiled next year.