Download North America Energy Trilemma, 2015

NS4054
Fall Term 2015
North America Energy Trilemma
Overview
World Energy Council Trilemma Framework
• Energy Security
• The effective management of primary energy supply from
domestic and external sources
• The reliability of energy infrastructure and
• The ability of energy providers to meet current and future
demand
• Energy Equity
• The accessibility and affordability of energy supply across the
population
• Environmental Sustainability
• The achievement of supply and demand side efficiencies and
• The development of energy supply from renewable and other
low-carbon sources
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The Energy Trilemma II
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The Energy Trilemma III
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Decision Tree Approach
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Energy Trilemma Top Performers
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U.S. Trilemma Balance I
• In 2014 the U.S. moved up three places in the index.
• The U.S. balances the three dimensions of the energy
trilemma in a fashion typical for a “fossil fueled” country.
• Strong performance on energy security and energy
equity are partially offset by country’s large
environmental footprint.
• A further diversified electricity generation system and
greater oil stocks lead to improved energy security
situating.
• Recent development of sources of shale gas will likely
help the U.S. become a net energy exporter in the near
future.
• Country maintains the global first place ranking on
energy equity – some of most (relatively) affordable
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energy in the world
U.S. Energy Trilemma Scores
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U.S. Trilemma Balance II
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U.S. Trilemma Balance III
• Performance on the environmental sustainability
dimension lags but shows improvement
• Slightly lower levels of energy and emissions intensities
• CO2 emissions from electricity generation are also
reduced but remain high
• U.S. predominantly conventional thermal energy mix
• Overall – country’s performance is constant and
improving
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U.S. Electricity Diversity
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U.S. Outlook
• Important energy policy developments in the U.S. that will
impact on balance in the three dimensions of the
trilemma include
• The Environmental Protection Agency (EPA) regulations
on coal leading to the projected closure of more than 200
coal plants in the next few years
• Accounting for more than 10% of the U.S’s current
energy production
• Possible regulations on unconventional gas production
• The extension (or not) of the wind production tax credit,
which can cut the cost of developing a wind project by
nearly one third.
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Canada: Trilemma Balance I
• Canada ranks sixth in the overall energy ranking
• Although one of the top Index performers overall,
Canada’s weaker environmental sustainability ranking
continues to undermine its overall score
• Canada is one of the largest energy exporters in the
world
• The country ranks exceptionally well on the energy
security dimension with
• A favorable energy export-to-import ratio
• A significantly diversified electricity generation mix away from
fossil fuels and
• A low economic dependency on fuel exports
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Canada: Trilemma Balance II
• Energy equity is also high with plentiful, relatively
affordable energy.
• Environmental sustainability remains Canada’s weakest
energy dimension
• Country has relatively, although decreasing levels of
energy and emission intensity due to
• long distances and
• a higher reliance on energy intensive resource
development industries than most countries
• Emissions per kWh generated stay at relatively low levels
because of the hydro heavy electricity fuel mix
• Contextual performance stable and strong
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Canada: Energy Trilemma Scores
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Canada: Trilemma Balance III
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Canada: Diversity of Electricity Generation
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Canada: Outlook I
• Canada’s high and improving position in the index
reflects
• The country’s extensive and diverse energy resource base and
• Public and private commitment to develop those resources
• The two main challenges Canada faces are
• Balancing resource development with environmental protection
and
• Developing diverse markets for Canada’s energy resources
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Canada: Outlook II
• The most recent energy policy developments include
• A strong focus on developing markets for oil and gas beyond
North America
• A faster energy infrastructure approvals process, and
• More stringent environmental standards for fossil fueled power
generation, both federally and provincially
• These initiatives should support continuing improvement
in Canada’s energy balance
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Canada: Outlook III
• The three key issues policymakers need to focus on are
• Managing the environment/climate impacts of energy resource
development
• Market diversification and
• Ensuring an appropriate sharing of the benefits from resource
development most notably with Canada’s aboriginal population
in whose territory most resource development and delivery
projects are being developed.
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Mexico Trilemma Balance I
• Mexico continues the positive trend of previous years
and moves up three places in the latest Index
• Like other highly industrialized countries, Mexico shows
• a strong performance in energy security,
• decent levels of energy equity, and
• an environmental sustainability ranking that lags behind
• The net energy exporter’s energy security remains stable
with no notable changes
• Energy equity is improving as prices for electricity and
gasoline are mostly stable, compared with sharp
increases in other countries
• Mexico still generates 81% of its electricity by burning
fossil fuels, and struggles the most with mitigating its
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impact on the environment
Mexico: Energy Trilemma Scores
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Mexico Trilemma Balance II
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Mexico: Electricity Generation
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Mexico: Outlook I
• The most recent policy development is the reform of the
energy sector.
• The government approved the constitutional changes
and respective legislation allowing the full participation
of the private sector though competitive markets in most
of the activities involved
• Thus the Mexican energy sector will have the challenge
to manage two transitions simultaneously:
• The transition from a monopolistic structure to a competitive
market scheme and
• From a high carbon to a low carbon economy
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Mexico: Outlook II
• One of the new laws establishes a cap-and-trade scheme
for the energy sector bringing it in line with the 2012
General Law on Climate Change
• Mexico is the second country, after the UK which has
enacted a law that frames the actions to be taken as far
as climate change is concerned
• The three explicit goals are
• By 2020 there should be a 30% reduction in GHG emissions with
respect to a business as usual projection
• By 2024, 35% of the electricity generation has to come from
clean energies (non GHG emitting technologies) and
• By 2050 an aspirational goal of 50% reduction in GHG emissions
with respect to a business as usual projection
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Mexico: Outlook III
• The greatest challenges policy makers need to focus on
to meet the above targets are
• The continuation of a renewable energy program and the reinitiation of a nuclear program
• Continued increase of production of both oil and natural gas on
and off-shoe as well of the development of shale gas resources,
and
• Improved energy efficiency conservation including decreasing
energy intensity
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Profiles of Energy Investment Challenges
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