Statement at the Energy Ministerial Conference, Opening Session

Delivered during the Opening session of the Energy Ministerial Conference in Astana, Kazakhstan.

Your Excellency, Mr Bakytzhan Sagintayev, Prime Minister of Kazakhstan,
Mr Timur Kulibayev, Chairman of KAZENERGY,
Excellencies,

We value Kazakhstan’s partnership with the UN and are grateful to you for convening this Energy Ministerial Conference. As the Coordinator of the Regional Commissions, let me warmly welcome you all to this conference. It builds on successive ministerial meetings including the first forum held here in Astana in 2010, the Asia-Pacific Energy Forum held in 2013 in Vladivostok, successive G20 Energy Ministers’ meetings, the Pacific Energy Conference of 2016 and ESCAP’s Energy Committee Meeting in January this year. We also look forward to the next Asia-Pacific Energy Forum expected to be held in Bangkok in 2018.

The 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change, together with market, infrastructure and technology advancements have great potential to shape a future powered by clean, sustainable energy. Energy supply enhancements are needed to address existing deficits and meet the needs of over 1.4 billion without energy access. Reducing dependence on fossil fuel sources is urgent as the carbon budget to keep the world within 2 degrees of warming is dwindling. Energy is the key contributor to anthropogenic greenhouse gas emissions, accounting for almost three quarters of the global total.

The global transition to sustainable energy certainly has begun. However, progress is uneven across the world and varies depending on political commitment, drivers of change and the state of energy policy and governance. A number of common trends are noteworthy.

  1. Energy supply and security considerations are driving increased energy connectivity and integration, particularly of power grids.
  2. Advances in distributed energy, energy efficiency and energy storage are reshaping traditional energy businesses and disrupting incumbent technologies.
  3. The application of digital technology to energy management has brought new benefits, offering possibilities through smart grids for optimising energy demand and increased use of decentralized energy. Counterbalancing these benefits are the increased cyber security risks to which energy networks are exposed.
  4. The energy-climate nexus continues to shape the energy mix. Over the past five years energy technology has been moving in a direction that is more innovative and sustainable. Solar power, electric vehicles and smart grids are some examples of transformative technologies which are combining into integrated solutions. Underpinning this, the falling cost of renewables is helping to steadily raise the global share of renewables in the mix energy, reaching to 24.3 per cent of electricity in 2016. According to the International Renewable Energy Agency, potential exists to double this share by 2030.

To accelerate the transition to a world based on sustainable energy, there is need to deal with long-term challenges and opportunities.

First, stabilising greenhouse gas emissions requires a switch to cleaner sources of energy. This process is already underway. 2016 marked the third successive year when global emissions remained unchanged. What is more, this emissions stabilisation happened in a year when the global economy grew 3.1 per cent. However more needs to be done. The UNEP Emissions Gap report reminds us that current NDC pledges are insufficient, leading us towards warming of at least 2.9 degrees. To keep the climate system within 2 degrees of warming requires global emissions to fall by up to 70 percent by 2050. To “stay the course” there is need to commit to new, more ambitious climate pledges through successive NDCs every five years under the Paris Agreement. Tracking an emissions reductions pathway to 2 degrees is possible. Therein lies the opportunity as we already have many of the technologies needed to achieve this. Low carbon pathways will arrest environmental degradation, with attendant benefits for people the world over.

Second, allowing markets to play a significant role in the energy transition will speed up the dynamics of change. This calls for removing distortions by reversing fuel subsidies and dismantling energy monopolies and regulations which perpetuate unsustainable practices. At the same time, the private sector can be allowed to play a more pronounced role in the energy transition through tax reforms and other policy incentives.

Third, investors, owners and operators of energy infrastructure need to work together to fully exploit the benefits of new technologies. New approaches to governance for physical and technological estates are critical to increase collaboration between operators, policy makers and governments.

Fourth, the convergence of digital and physical infrastructures could enhance energy security. New capabilities are required to manage a more complex, interconnected energy system, requiring investment in capabilities for risk management.

Fifth, critically the energy transition must manage the financial instability risk from billions of dollars of fossil fuel assets which may become stranded. Structural changes in the economy must be managed including addressing the transition of workforces and skills from old industries to new.

Sixth, enhancing sustainable energy finance to meet the growing investment requirements calls for financial diversification and effective regulations with supportive credit enhancement mechanisms to safeguard investments and enhance risk appetite.

Finally, cross-border energy cooperation is needed to harmonize legal and regulatory frameworks and build interconnected power grids which enable cross border energy markets.

To support the Asia-Pacific regional sustainable energy agenda, ESCAP member States established an intergovernmental Committee on Energy – the only intergovernmental energy platform in the region – to reach consensus and forge regional agreements. This Committee has started to consider how to best deliver on energy priorities in the region, including SDG7 and regional energy connectivity.

In conclusion, we should not underestimate the remaining challenges of the transition to sustainable energy. The energy landscape is changing as we witness new discoveries of vast shale gas reserves and increasingly cost-effective renewable energy. Future supply challenges can be met by exploiting clean energy sources, coupled with regional energy cooperation and integration. Advances in energy efficiency save costs and increase productivity, responding to climate change, energy insecurity and air pollution. Progress in decentralised renewable technologies, coupled with energy efficiency are widening opportunities for energy access. Avoiding the cost of stranded assets to energy consumers is critical to manage economic and political risks.

This Ministerial exchange can serve to share experiences and knowhow on policy making, technology deployment and business-models to tackle the challenges of energy transition.

I thank you.