Energy security and political rhetoric influence energy markets, Schneider Electric finds

In its 2019 Global Energy Outlook, Schneider Electric explores the intersection of Politics and Energy Policy, concluding that it is a busy one. Unfortunately, not everyone agrees on the traffic signals and, as a result, there’s a lot of gridlock, Schneider Electric opines. Even as scientists warn that world leaders are running out of time to take comprehensive action on climate change, some politicians are still debating the existence of the problem, Schneider Electric suggests.

Across the globe, the carbon-free future campaigners are in a tug of war with the fossil fuel advocates. Bold plans set in motion by one administration are postponed or cancelled by the next, according to 2019 Global Energy OUtlook from Schneider Electric.

In the United States, the Trump Administration is opening up protected public land and offshore waters for gas and oil drilling. At the same time, market forces are tipping in favor of renewables. According to a Reuters analysis, more coal plants closed during President Donald Trump’s first two years in office than during the first five years of the Obama administration. Executives have realised they can generate more revenue from a new wind farm than a new coal plant, with or without federal subsidies. In Australia, the Liberal and National parties want to guarantee coal’s future with a $5 billion fund for future power plant construction.

In Australia, the Labor Party, meanwhile, wants to set even more ambitious targets for reducing emissions than the ones set by the Paris Agreement. Even in the European Union — where politicians are taking some steps to address climate change — progress has been slow.

There is existing uncertainty in the UK over participation in the EU ETS for the 2019 and 2020 compliance years: to stay in, in case there’s a deal by end of October, or drop out in case of a no-deal Brexit. Looking much further ahead for the UK: the scrapped nuclear project, and the ambitious net zero carbon emission target by 2050 will require a significant ramp up in alternative sources of power generation, such as an almost 10-fold increase in offshore wind generation.

There is regulatory uncertainty in France and Germany, as well, in regard to long-term energy plans. Leaders say they want to phase out coal, but there is uncertainty about the speed and specifics of the transition. At the start of the year, French President Emmanuel Macron paused a planned tax increase on fossil fuel to allow a national debate on energy policy.

To get more information and insight on this year’s trends, you can download the report here: https://bit.ly/2WPj3zk