World's energy systems struggle to go from brown to green, new study finds

David Fogarty Straits Times 14 Mar 18;

SINGAPORE - Most of the world's energy systems have become more accessible and more secure but not any greener, a study published on Wednesday (March 14) by the World Economic Forum (WEF) found.

In collaboration with advisory firm McKinsey and Company, the study, "Fostering Effective Energy Transition", looked at the energy systems of 114 countries which accounted for more than 98 per cent of global gross domestic product, focusing on their electricity grids as well as fuels for transport and cooking.

The authors found that over the past five years global progress towards environmental sustainability has stalled. Environmental sustainability refers to how green energy systems are, particularly the electricity sector, and whether electricity production is becoming more environmentally friendly over time by steadily reducing carbon dioxide (CO2) and improving air and water pollution.

"The energy transition is one of the key challenges facing society today," said Pedro Gomez Pensado, Head of Oil and Gas Industry at the WEF and leader of the forum's energy transition project.

"Energy systems definitely need to move into better environmental performance," he said. "This is something that is not only important, there is a sense of urgency," he told The Straits Times.

The authors wanted to see how well prepared national energy systems are to switching to greener power as a key part in fighting climate change. Mr Gomez Pensado said the findings would help countries, particularly developing countries, create a road map to improve their energy infrastructure to bring electricity to more people and boost growth without pumping more CO2 into the air.

Globally, the energy system, through burning fossil fuels, is responsible for more than two-thirds of mankind's greenhouse gas emissions. Burning coal in power stations and steel-making is by far the single largest source of CO2 that scientists say is heating up the planet. So cutting emissions, particularly from the electricity sector, will be crucial in limiting global warming.

The report's authors benchmarked each of the countries against a series of standards, namely how well they are able to balance energy security and access with environmental sustainability and affordability. Other metrics included the strength of regulation and government institutions, access to capital markets and an inventive, nimble business sector that is quick to adapt.

The authors found that Singapore ranked 12th and Malaysia 15th in the index. By comparison, Sweden, Norway and Switzerland made up the top three. Britain came in at 7th and France 9th, the only G-7 economies in the top 10.

"Although Singapore has a well-functioning energy system, it ranks below most advanced economies on the system performance component of the index. High CO2 emissions per capita and dependence on energy imports are the key indicators that affect Singapore's energy system performance," says the report.

However, Singapore ranked 9th globally on the readiness component of the index. "Strong institutions and regulatory frameworks, culture of innovation, and modern infrastructure will enable Singapore's energy transition," the authors say.

The United States scored 25th, ranking poorly on environmental sustainability, but lifted by strong innovation and vibrant capital markets. China ranked 76th, but achieved "leapfrog status" because of recent mandates for electric vehicles and political commitment to addressing environmental challenges, such as creating a national carbon trading market. Its performance suffered because coal is still the major source of energy. India came in at 78th and Indonesia 53rd.

Switching to a greener energy, though, is no small challenge. More than one billion people lack access to electricity and nations will face demands for energy from an additional two billion people by 2050, the report said. Delivering that energy at an affordable cost and with a declining CO2 emissions is a huge challenge, say the authors, but also an economic opportunity in embracing new types of energy.

"There have been important technological advancements. Many renewable energies are becoming very cost-effective," said Gomez Pensado.

"It is important that all countries start thinking about this and build their road maps of where they want to get to. There are many technologies available and they have to look at everything that is in the menu," he added.