The Global Energy Architecture Performance Index Report 2016 highlights similar themes and patterns as in previous years, including the top performance of OECD countries, regional strengths and weaknesses, and complex trade-offs and interdependencies across the energy architecture indexes. However, technology and the international backdrop are changing at a rapid pace, creating new challenges that will require companies and policy-makers to quickly develop new strategies for the world’s global energy systems.
While a relatively stable pillar of the EAPI, energy access and security will be the nexus of disruptive trends unfolding in the global energy architecture – from new opportunities and risks to infrastructure resilience created by increasing diversity of supply sources, to the threats and vulnerabilities resulting from the convergence of digital technologies, and to physical assets and the challenges and uncertainties of a rebalancing geopolitical landscape. Early action to mitigate the risks and prepare for changing conditions will be critical to future energy security.
The proliferation of distributed energy has brought more diversity to power supplies and new opportunities for energy security, but it also poses new challenges for electric utilities and grid resilience. Technologies such as industrial-scale storage solutions are expected to further facilitate the integration of variable capacities into the grid. Until then, however, some centralized baseload reserve capacity and data-driven forecasting will be critical to grid reliability. The industry’s existing business model is being challenged. As distributed generation becomes more prevalent, utilities will need to adapt. Governments can provide the market mechanisms and regulatory policy to help electric utilities integrate new sources of energy and new market players, and to ensure a secure power supply.
The convergence of the technical and physical worlds, while offering unquestionable advantages, also opens the energy system to new threats and security risks. New approaches to governance for physical and technological estates will be required. As many of today’s threats affect legacy rather than modern digital systems, investment in robust cyberdefence will be essential to provide intelligent digital responses to digital threats.
Finally, long-term changes in fuel trade patterns between the US, Asia and the Middle East accompany a change in global power and geopolitics. Key powers that traditionally managed global supply and demand may no longer be able to do so to the same extent. Greater collaboration is still required between states to closely monitor an increasing number of hybrid threats, but more actors – including non-state organizations, individual citizens and new coalitions – are becoming relevant, and in previously unforeseen ways, to strengthen or threaten international security arrangements.
Major driving forces are prompting fundamental transformations across global energy systems. Successful transitions, however, will rely on the ability of companies – as investors, owners and operators of energy infrastructure – to ensure affordable and secure supplies, and to reap the bene ts of new technologies. Governments will play a critical role by monitoring opportunities resulting from developments in the energy sector, and by taking new approaches to governance to safeguard energy security in the short and long term. At this pivotal juncture for the energy sector, operators, policy-makers, and national and international entities with the capabilities to tackle new digital and physical security threats must collaborate with each other – the critical step to achieving effective and secure transitions.