5 Global Energy Trends to Watch

Student energy recently checked in with students on five continents to see what the future leaders feel are the most important energy challenges and opportunities to keep an eye on. Their insights might surprise you…

The Big Grid Shift

The transformation of the electrical grid in the developed and developing world will dictate how our global population uses energy for the next 100+ years. In the developed world, the grid is facing increasing pressure to adapt to a changing supply mix that includes an influx of intermittent and unpredictable renewable power that needs access to the distribution network. With the price of solar dropping so dramatically, companies like Solar City have revolutionized the solar business proposition. Energy regulators and utilities are scrambling to create policy and build infrastructure that can accommodate this new supply.

These changes leave the energy leaders of the future asking tough questions like: is base load power a thing of the past? Will smart technology be able to accommodate for the uncertainty that accompanies power that is only available when the wind blows and the sun shines?

And in the developing world, where grid-access is a continuing problem, distributed, community-level renewable solutions combined with innovative low-cost technologies are deeming the traditional grid model virtually useless. While there is still a push from the people for a grid and government support in delivering clean energy, the question is whether or not the models that worked in the developed world apply or if all new solutions will be required to serve this unique market.

Changing Energy And Trade Markets

The shifting energy dynamics of this period will be a defining chapter in ‘the story of energy’ well into the future. The production growth from non-OPEC countries, combined with the demand growth from non-OECD countries, presents a new energy trade dynamic that the world is trying to wrap its head around.

The advent of horizontal drilling, hydraulic fracturing technologies and the subsequent shale gas boom in the US has been economically advantageous for the US and is set to render it “energy independent” by 2020. This story is sure to be told over again in other regions that are considering development of unconventional gas resources and will have repercussions for global gas prices as well as climate policy. In addition to this, the US has added 3 million barrels of oil/day. This production has eased global oil price disruptions normally felt by political unrest in the Middle East, and has reduced Russia’s energy dominance in Europe.

Even with all these global changes, all eyes still remain on China. In the next five years, almost half of global oil demand growth will come from its growing transportation needs. And, it recently inked a $400 Billion USD natural gas deal with Russia for the next 30 years that may be powerful enough to kill budding LNG plans in other jurisdictions around the world.

Energy Storage

The race for the energy storage (holy grail) solution is on. The players in the game are all looking to the multi-trillion dollar annual market that potentially exists, should these storage solutions become commercially viable? Really, it’s only a matter of time. Storage promises to solve all the intermittency problems that plague renewables.

Utilities are calling for energy storage pilot projects, Tesla’s building a battery gigafactory, and startups are popping up all over the map to try and drop the costs associated with storage technologies. On all fronts, it appears that the energy technology to watch is storage.

Se4all

The UN Secretary-General, Ban-Ki Moon, has declared the next ten years to be the decade of “Sustainable Energy for All”. Specifically, he has set three important goals:

• Provide universal access to modern energyservices to the 1 billion people without electricity and the 2.5 billion who lack access to modern cooking energy
• Double the global rate of improvement in energy efficiency
• Double the share of renewable energy in the global energy mix

This is no simple task and the UN estimates that it will require investment upward of $700 Billion and full political buy-in. This macro-goal will underscore global climate negotiations that will take place over the next year as nations gear up for COP21 in Paris.

While it may seem daunting, there are signs that the developing world is already moving in this direction as we see mass-electrification efforts in these countries. Kenya will connect 1 million people to the grid in 2014, and Bangladesh is installing 80,000 solar PV systems a month! Could universal energy be a true possibility? Only time will tell.

Political Instability

It remains to be seen what the destructive havoc in the Middle East and the Russia/Ukraine conflict means for global energy relations in the years to come.

The severity of western sanctions against Russia is threatened by China’s relationship with Russia.

And in the Americas, Mexico’s restructuring of its state-oil giant, PEMEX, as well as oil production growth from the US and Canada has the potential to unhinge OPEC’s command of global oil prices.

So, it is safe to say that the only certain thing at this point is that the next five years of energy development are uncertain at best.