Critical global uncertainties including the ongoing U.S.-China trade dispute, growth prospects clouded by macroeconomic risks and climate change are keeping energy leaders awake at night, a new survey by the World Energy Council (WEC) revealed.
The WEC’s recently published World Energy Issues Monitor 2020 of the World Energy Council incorporated responses from over 3,000 energy leaders from 104 countries.
Leaders were asked about their views on the most critical uncertainties, priorities and key issues defining the energy world globally, regionally and nationally.
The results show that macroeconomic and geopolitical issues were the biggest uncertainties for energy leaders.
"The strained trade relations between the U.S. and China have led to higher uncertainty across all regions. Tariffs imposed on energy and other goods between the U.S. and China together with emerging technology tensions are seen globally as having an impact beyond just the world's two largest economies," the WEC survey underlined.
The uncertainty has affected confidence and led to lower energy demand growth prospects, it said.
Although some tensions were eased when the two countries signed a phase-one trade agreement in January 2020, they left a number of issues unresolved that need to be dealt with.
The report showed that another critical uncertainty for leaders is the economic challenges of consumer countries that are directly affected by incomes of energy producer countries, especially those heavily dependent on oil and gas exports.
The survey exemplifies Nigeria as the country that saw a significant decline in energy export revenues due to lower prices while Colombia's economy continues to be severely impacted by the oil price collapse of 2014 when the oil price started to decline from $100 level down to levels as low as $30 per barrel.
Climate change was cited as a third critical uncertainty for energy leaders worldwide.
"Uncertainty remains around the impact of intensifying extreme weather events and the need to adopt climate adaptation and mitigation measures. Countries with greater exposure to extreme weather events show more concern about the pace of climate change with more frequent incidents of extreme weather events such as flooding, droughts and forest fires," the WEC found in the survey.
Technology improvements, including blockchain and smart applications, energy efficiency and distributed energy systems are top priorities for global energy leaders. These leaders viewed that regional integration is a "desired" means of improving energy security.
-Middle East dynamics and Russia pose uncertainty for Turkish energy leaders
Middle East dynamics, EU cohesion, Russia and nuclear energy are creating critical uncertainties of Turkey's energy sector leaders, the survey showed.
"Middle East dynamics has increased dramatically in impact, becoming the leading critical uncertainty. Turkey’s location makes it impossible for the country to avoid the impact of events in the Middle East. Regional instability, in particular in neighboring countries, is also a cause of uncertainty," the survey found based on the responses of sector representatives.
"Russia is another critical uncertainty most likely due to the country’s involvement in the Syrian conflict on the political front. Another area of uncertainty concerns the TurkStream pipeline. The project has strategic importance for Turkey as it will help to enhance gas security by eliminating third party related transit risks," the WEC said.
The TurkStream gas pipeline became operational at the beginning of 2020 and plans to carry 15.75 billion cubic meters of natural gas from Russia directly to Turkey.
Nuclear energy is also considered a critical uncertainty as Turkey currently works on the construction of its first nuclear power plant, the first unit of which is set to become operational in 2023.
The Akkuyu Nuclear Power plant located in the Mediterranean city of Mersin plans to have 4,800 megawatts of installed capacity in four units.
According to the survey, Turkey's priority actions for 2020 are in line with the global trend towards renewable energy and energy efficiency.
"Economic growth is a central issue in how fast the country transitions to scaling renewable energies and energy efficiency mechanisms that can effectively reduce demand while maintaining growth," the WEC said.
By Nuran Erkul Kaya