Energy sector facing a 'double whammy'

3rd July 2014

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  • Adaptation ,
  • Generation ,
  • Conventional


Tauras Kalasauskas

The twin impacts of climate change and rising costs present increasing challenges for energy production and transmission, according to separate reports from the World Energy Council (WEC) and Eurelectric, the body representing the electricity industry in Europe.

The WEC report finds that all energy sectors will be affected by the impact of climate change. The oil and gas industry is likely to suffer increased disruption and production shutdowns due to extreme weather, while power plants will also be disrupted and energy facilities in coastal areas will be affected by rising sea levels. Also, energy transport infrastructures, including oil and gas pipelines and electricity grids, will be affected by storms and extreme temperature changes, and electricity generation from thermal and hydroelectric stations and renewables will be disrupted by bad weather.

“The time has come to get real about the challenges facing the energy sector. Climate change is certain to impact the energy sector,” said WEC secretary general Christoph Frei. The council says more needs to be done to move to a low-carbon economy, arguing that this can be achieved by investing in lower-carbon fuels, increasing use of renewables and nuclear, improving energy efficiency and introducing carbon capture and storage.

It warns, however, that the annual investment costs associated with such a transition would be up to $900 billion over the next 35 years.

Eurelectric, meanwhile, says that, without a concerted effort by the industry, policymakers and consumers to manage the energy system more effectively, total energy expenditure could be 50% higher in Europe by 2030. It reports that European expenditure on electricity and gas surged by more than 18% between 2008 and 2012, from €450 billion to €532 billion.

It recommends the creation of a single energy market for Europe to better link supply and demand, and says that optimising renewable energy systems, so that solar and wind generating systems, for example, are sited in the best locations for the technology, could save Europeans up to €20 billion a year. Further savings could be achieved by implementing more intelligent grid management, and by improving demand response and energy efficiency.

According to the analysis, shifting some peak demand could improve reliability and reduce costs significantly, resulting in overall savings of between €5 billion and €20 billion a year on energy expenditure.


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