The UAE leads the MENA region as it looks to improve energy efficiency while diversifying their economies and energy mixes through an increased use of solar and nuclear power, according to the new Trilemma Index ranking issued at the World Energy Congress in Istanbul, Turkey.
The region is facing several challenges, particularly around the fact that MENA countries have high energy intensity, GHG emissions, and extensive use of finite fossil fuel reserves. Combined with water scarcity concerns, these challenges, if not addressed, could threaten the region’s energy security and environmental sustainability.
Fossil-fuelled economies, such as the UAE, are also facing energy security threats due to their high rate of energy consumption growth. The UAE in particular has recognised the risks associated with high rate of energy consumption growth, and is making concerted efforts to mitigate their effects, including energy diversification. The UAE’s efforts have been noted in the index, with the country ranked 43rd on the index placed on the the World Energy Council’s positive watch list.
Its goal to increase the low-carbon energy contribution of renewable energy and nuclear power to 24per cent of the overall energy mix by 2021.38 has the potential to improve the country’s performance in the energy security and environmental sustainability dimensions, but may reduce its energy equity scores in the index. The UAE plans to meet these targets using government-driven investment in large infrastructure projects, technical assistance and cooperation agreements with international energy agencies and governments, as well as economic support mechanisms including net metering and slab tariffs, to improve the competitiveness of solar energy and overall improved energy efficiency.
The findings of the index signal that countries such as the UAE are building more sustainable energy systems by concurrently addressing the three dimensions of the Energy Trilemma - energy security, energy equity and environmental sustainability.
The Energy Trilemma Index 2016: Benchmarking the sustainability of national energy systems prepared by the World Energy Council, in partnership with Oliver Wyman along with its parent Marsh & McLennan Companies’ Global Risk Center, provides a comparative ranking of 125 countries in terms of their ability to provide secure, affordable and environmentally sustainable energy systems.
The 6th annual edition presents a new methodology based on a comprehensive set of 35 indicators with enhanced focus on diversity, quality and affordability of supply as well as the resilience of a country’s system.
Joan MacNaughton, Executive Chair of the World Energy Trilemma report said: “Energy access and climate change have never been so high on the agenda as now, following the COP 21 Paris Agreement, the UN Sustainable Energy Goals, and the attention accorded these issues by the G20. This shift in energy priorities is bringing greater diversity to the global energy mix, helping to underpin security of supply while increasing sustainability. Together with the increase in access to modern energy services - 85 per cent today now compared to 80 per cent in 2000 - this demonstrates how, overall, energy policies are leading to a more sustainable energy world.
But with only 13 of 125 countries achieving a triple A score for their progress on the Trilemma goals, our work continues to offer valuable lessons for policymakers on how to create the frameworks which will incentivise investment and innovation to deliver secure energy for all while meeting the climate challenge.”
Francois Austin, Global Energy Practice Leader, Oliver Wyman said: “The Trilemma Framework is clearly shaping and influencing government policy, investors’ perspectives and the energy sector around the globe.
For policy makers, the Index rankings help structure dialogues on the complex trade-offs in developing and implementing energy policy and regulations that will support secure, affordable and environmentally sustainable energy. Investors are increasingly assessing how and where to invest in the energy sector through the issues highlighted in the framework, and for energy business leaders, including IOC, NOCs and utilities, the Index provides insights to inform long-term strategies.”