- Annual ranking of 129 countries finds only three get an AAA score
WASHINGTON, DC, Nov. 24, 2014 /CNW/ - The decisions that governments and investors make today will make or break the sustainability of global energy systems for years to come, according to a new World Energy Council report.
The report, "World Energy Trilemma: time to get real - the myths and realities of financing energy systems", finds that as global energy systems are being placed under increasing strain and as governments limit their spending, the ability to implement the US$48 trillion investments required for energy over the next 20 years is put into question, threatening countries' ability to supply sustainable, reliable, and affordable energy for their people.
Joan MacNaughton, Executive Chair of World Energy Trilemma, commented:
"Unlike many commentators' warnings, our report finds that capital is available in the private sector to the required scale, but investors and developers will have to invest way beyond their comfort zones, and they will need better help from governments, regulators, and international financial institutions than is currently envisaged."
To achieve the necessary investment levels, the study identifies the following recommendations from the financial sector:
Policymakers must implement regulatory and policy frameworks to encourage investment and reduce political and regulatory risks.
Financial infrastructure must be in place for capital to flow easily to the energy sector, while financiers must get more comfortable with investing in new technologies and developing countries with the greatest need for new infrastructure.
The energy sector must generate a robust pipeline of bankable projects.
The report also includes the Energy Trilemma Index, a quantitative ranking that this year has placed four countries on negative watch (Germany, Italy, Japan, UK), while other countries could improve in one or more trilemma dimensions: energy security, energy access and environmental sustainability. Of the ranked 129 countries, only three have achieved an 'AAA' score on their trilemma, with one of those countries being the UK which is showing a downward trend in energy security.
The work was conducted with the global management consultancy Oliver Wyman and the recommendations based on interviews with nearly 50 leaders from international energy finance.