The future of energy, towards sustainable development

The future of energy, towards sustainable development

Editorial Staff
The event, organized by Ambrosetti and Eni, intended to focus attention on the planet's energy fate in light of the sharp fall in oil prices, the latest gas field discoveries and the affirmation of renewable energy against a progressive containment of installation costs

When talking about the global energy future, it has been inevitable, for some years now, to pull out the "sustainable" attribute. The international and industry community is, in fact, becoming increasingly aware of the importance of ensuring an increase in production that is able to meet the energy demand and that makes it more accessible to all, without this having a negative impact on the environment. This was the pivot around which the international forum revolved, entitled "The future of Energy", organized by "The European House – Ambrosetti " and Eni, held on September 20 at Palazzo Mattei in Rome. A high-level meeting intended to focus attention on the planet’s energy fate in light of the sharp fall in oil prices, the latest gas field discoveries, especially in the eastern basin of the Mediterranean and in Africa, and the affirmation of renewables against a progressive containment of installation costs. Playing host was the Chairman of Eni, Emma Marcegaglia, who took stock of the current economic stagnation recorded globally, which is particularly evident in Europe itself. A scenario burdened by the difficult state of the energy market, which encourages a change of route, to regain greater competitiveness. Therefore, the path to sustainability seems unavoidable, and gas presents itself as the clean source that can now accompany the planet towards the ultimate energy transition. Two points on which CEO of Eni Claudio Descalzi drew attention were: being able to provide access to energy to one billion, 300 million people who are still deprived of this essential resource and reducing CO2 emissions related to energy production: "Access to energy means promoting new growth. Lack of development is often linked to lack of energy ". In this sense, Descalzi made explicit reference to Africa, which "paradoxically holds huge energy resources but cannot access them". This requires rethinking the business models in order to overcome these inequalities and to trigger a virtuous circle that balances development with environmental protection.

Emma Marcegaglia - President of Eni: "Strengthening the role of gas in Europe's neighboring countries, this seems to be the only concrete path in supporting the decarbonization process and reaching the European goals in terms of security and diversification of the energy supply, and evermore pressing challenge in these past years."
Claudio Descalzi - CEO of Eni: "the Western model has not allowed for 1.3 billion Africans to have access to energy and 2.7 billion still use biomass for cooking and heating. We have to think less about profit and more about value creation, which in Africa means investments in infrastructure, creating alternatives to the oil and gas sector."

The importance of diversification

In his speech, the Italian minister for Economic Development, Carlo Calenda, also touched on the subject of Africa, hoping for an increased diversification of supply sources in the old continent. "Diversification is the key word for Europe’s energy future", specified the minister, "and the routes via which this can be achieved are those that lead to Africa and the eastern basin of the Mediterranean ". "For Europe, it becomes crucial to intervene to improve and connect the energy infrastructure networks to safeguard energy security that is mainly based on gas", stated Calenda, a statement also endorsed by European Commissioner for the Energy Union Maroš Šefčovič, according to whom "the concept of energy transition is inextricably linked to the process of modernization of the entire European and global economic system". An action "that must be collective, and that must involve the entire international community", emphasized Sefcovic, observing how “Europe has been a pioneer in defining a strategy of transition from the old energy model based solely on fossil resources to the increasingly extended use of alternative energy sources, and now, this principle cannot be abdicated while the whole world, including giants such as China, are following the path to transition". Edward Morse, Global Head of Commodities Research at Citigroup, pointed out that "for a definitive affirmation of renewable sources, it is still necessary to resolve the problems linked to storage and supply, given that it involves resources that are unstable in nature". Also according to Sefcovic, gas "is an important driving force for reconciling a change of energy route and the need to meet the requirement of a reduction in emissions, also established by the latest Paris agreement (COP21)."

Carlo Calenda - Italian Minister of Economic Development: "Energy security must be a European policy and ‘diversification' must be the key word for this policy: we have to open new routes, new routes with Africa."
Maros Sefcovic - Vice-President of the European Commission and European Commissioner for the Energy Union: "Gas can represent the most efficient energy resource which can carry Europe towards its energy transition. For this reason, the relationship with Africa, in terms of new discoveries and possible available gas resources, have become of fundamental importance for Europe, within a system of reciprocal advantages and new development."
Edward Morse, energy economist, main researcher at Citigroup: "the costs for renewable energy production are progressively decreasing but we have to sensibly improve the technology that will allow us to improve distribution and supply systems of these energy sources which currently have certain stability issues which we could improve on by investing in new technology. Today, markets can benefit from access costs to minor energy, but the drop in oil and gas prices will continue to cause problems for producing countries."

The commitments of COP21 and the challenges that lie ahead

OPEC Secretary General, Nigeria’s Mohammed Sanusi Barkindo, welcomed the commitments made in December during COP21. "The OPEC member states", emphasized the secretary general, "will not back out of the mandate to implement the Paris agreements. The challenge that lies ahead involves answering two questions: how to ensure a greater supply of energy to meet the global demand that, according to our estimates, will grow by 50% and how to reach this goal in a sustainable manner. What is clear," concluded Barkindo, "is that we cannot rule out any source. The question is how to best use each source". Via link with New York, Jeffrey Sachs, Director of the Earth Institute at Columbia University, stressed the need to advance the search for new technologies to increase the level of sustainability of energy production processes, especially as regards the carbon capture system. Sustainability was the focus of the speech of Robert Armstrong, Director of the MIT Energy Initiative: "We have a dual challenge. We need to supply energy and, at the same time, we need to decarbonize the energy industry". Armstrong then added that at the MITEI itself, they are studying a plan in which "a crucial part is represented by low-carbon energy centers, crucial for achieving a low-carbon energy future". Going into detail on renewable energies, the Director of MITEI added that for solar energy "we know that there is a rapid growth. Here, the challenge is price reduction. We need a continuous production of energy to lower costs and facilitate its use, especially in developing countries."

Mohammed Sanusi Barkindo - OPEC Secretary General: "OPEC looks with favor on the climate agreements made in Paris and our member states will take part in the implementation of the accords. The challenge that awaits us implies the answer to two questions: how can we assure a greater energy supply to match the demand which, according to our estimates, will increase by 50%? And, how can we reach this goal in a sustainable manner' What is clear to me is that we can cannot leave out any source, the issue is figuring out how to best use each one."
Jeffrey Sachs - Director of the Earth Institute at Columbia University: "the priority for Africa is the development of the electric power industry. The continent possesses large oil and gas reserves, but in addition can count also on two ‘mega-sources' of renewable energy: solar and hydroelectric. In several countries in Central and Northern Africa, there are projects in place which are very important for the development of these renewable sources which require investemets. So I say: gas in Eastern Africa, solar in North Africa and hydroelectric in Central Africa."