Investment on renewables to continue despite low oil prices

Investment on renewables will continue despite the drop in oil prices, a top energy expert said on Wednesday at the World Future Energy Summit.

“I don’t see the recent volatility threatening the renewable sources of energy. Countries will continue to invest on renewables as the cost comes down and the issue of climate change becomes important,” said Marie-José Nadeau, Chair of the World Energy Council speaking to Gulf News.

On oil prices, which have fallen more than fifty per cent since June, she said prices were never stable or fixed. “It’s a cyclic phenomenon. We don’t know how long it is going to last or when they will recover but there is a general consensus that prices may rebound by the end of this year or early next year.”

The fallout of oil prices, she said would be on tight oil production in the US. “There will be less production as oil prices go down.”

Meanwhile, the World Energy Council released a report on Wednesday which said that energy leaders see energy price volatility and the future of a climate framework as their top critical uncertainties.

The 7th annual World Energy Council report, World Energy Issues Monitor — energy price volatility: the new normal, is a barometer of the top issues set to shape the energy sector for the year ahead.

This year the report has gathered the views of more than 1,000 energy leaders worldwide, including ministers and chief executives from nearly 80 countries.

For the Middle East and North Africa (Mena) region, concerns about the future of coal and LNG have risen in terms of both uncertainty and impact, the report says.

New normal

The World Energy Issues Monitor revealed that the uncertain impact of volatile energy and commodity prices has established itself as the number-one issue for energy leaders worldwide. Energy leaders are worried about the recent sharp plunge in the oil price to its five-year low.

Speaking about the report, Nadeau said energy leaders in the Middle East and North Africa are concerned not only by the impact of climate change on their businesses but also the impact of energy production on their fragile environments.

“The region’s increasing uptake of renewables, as we see in countries such as the UAE, shows that alternative energy and conventional fossil fuels are not mutually exclusive. The Middle East is providing excellent examples of how innovation and resource diversification could help countries meet the challenge of the energy trilemma, namely the interplay between energy security, access to energy at an affordable price, and environmental sustainability.”

Christoph Frei, Secretary General of the council said high price volatility has become the new normal facing energy leaders.

“This is the context in which we expect them to take investment decisions at an unprecedented scale.”

“The unprecedented uncertainty, the need to redefine infrastructure resilience in response to emerging risks, the expectation of changing market designs and evolving business models, as well as the changing geopolitical balance have all placed energy among the top strategic issues globally for at least the next decade.”

The 2015 survey underlines the way that geopolitical issues have gained importance for energy security, especially with the Russia — Ukraine conflict.