Laura Clementi, Communications Specialist, Public Engagement, Tel.: +41 (0)79 571 8312, Email: lcl@weforum.org
Davos-Klosters, Switzerland, 20 January 2015 – Diminishing financial returns for utilities have put at risk the ability of the electricity sector in OECD markets to raise the estimated $7.6 trillion in investments needed by 2040 to meet energy policy objectives, according to a new report from the World Economic Forum. This investment is needed to simultaneously decarbonize the sector while maintaining energy security.
The Future of Electricity report offers guidance on transforming the electricity sector to a more sustainable, affordable and reliable system, and outlines recommendations for policy-makers, regulators and businesses in developed markets to attract needed investment. It is part of a broader Future of Electricity initiative, which was launched at the World Economic Forum Annual Meeting 2014, and aims to provide countries, companies and societies with a platform for dialogue and learning amid the transition to a lower-carbon electricity system.
“Since 2000, OECD countries have invested more than $3 trillion in new renewables, conventional power plants and distribution structure, but about 20% more investment a year is still required over the next 15 years,” said Roberto Bocca, Head of the Energy Industries at the World Economic Forum. “Collaboration across stakeholders will be critical to achieving this goal and providing the holistic perspective needed to successfully make the low-carbon transition.”
“The electricity sector is at a crossroads. We are entering a period of unprecedented investment to meet our energy policy goals, but decreasing returns and increasing risk are raising questions over future investment,” added Julian Critchlow, a partner at Bain & Company, which collaborated with the Forum on the report. “OECD countries will need to take immediate action to ensure continued investment across the energy value chain.”
According to the report, root causes of the sector’s investment challenges include:
“There are many lessons to be learned. Stakeholders across the energy sector need to collaborate to foster more cross-border cooperation while ensuring stable regulation,” said Ignacio Galán, Chairman and Chief Executive Officer of Iberdrola, and current chairman of the Forum’s Energy Utilities community. “Central to this effort is a commitment to decarbonizing economies and a meaningful agreement at the Paris climate change talks this year.”
The report also provides recommendations for key stakeholders for attracting investments to build the future electricity sector:
“Energy builds and supports modern economies, and is fundamental to our daily lives,” said Steve Bolze, President and Chief Executive Officer of GE Power & Water and Chairman of the Forum’s Energy Technology community. “We have an obligation to future generations to address the current limitations impacting the electricity sector, and provide a sound foundation for future economic progress and quality of life improvements.”
The Co-Chairs of the Annual Meeting 2015 are: Hari S. Bhartia, Co-Chairman and Founder, Jubilant Bhartia Group, India; Winnie Byanyima, Executive Director, Oxfam International, United Kingdom; Katherine Garrett-Cox, Chief Executive Officer and Chief Investment Officer, Alliance Trust, United Kingdom; Young Global Leader Alumnus; Jim Yong Kim, President, The World Bank, Washington DC; Eric Schmidt, Executive Chairman, Google, USA; and Roberto Egydio Setubal, Chief Executive Officer and Vice-Chairman of the Board of Directors, Itaú Unibanco, Brazil.
Notes to Editors
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