The World Energy Council (WEC) has launched a new initiative to help mobilize investments into the energy sector. The WEC project, Financing Resilient Energy Infrastructure, will seek to understand how the energy and finance sectors can work together and with other sectors to better understand risk and uncertainty in energy infrastructure and thereby unlock the capital needed to accelerate the transition to a resilient global energy economy.
WEC Secretary General Christoph Frei said, “New emerging risks are posing ever greater threats to the energy sector. Unless we have solid understanding of the nature of these risks and appropriately adapt energy financing mechanisms and infrastructure design, we may well see an investment impasse that could threaten to cripple global energy systems. Our new initiative will develop the necessary understanding as catalyst for continuing to mobilize the massive capital flows required to expand, replace, and transition our energy infrastructure.”
The project will seek to find out how much additional energy infrastructure investment would be needed to address the emerging technical and physical risks. These risks include water stress and the energy-water-food nexus; extreme weather events; cyber threats; social activism; and technical efficacy, or how the development of non-energy technologies impacts energy generation.
The initiative will identify and characterize the nature, frequency, and severity of these risks, and will share and promote the incorporation of these risks into energy infrastructure design and investment decisions. The first phase of the study will be released in the first half of 2016, ahead of the World Energy Congress.
The WEC will carry out the project with two new project partners: Swiss Re, the global re/insurer, and Marsh & McLennan Companies Inc., the global professional services firm offering clients advice and solutions in risk, strategy, and human capital.
The project officially launched Oct. 1 at the knowledge network’s inaugural meeting at the Swiss Re Centre for Global Dialogue in Zurich, Switzerland.
Juerg Trueb, head of Environmental and Commodity Markets at Swiss Re Corporate Solutions, commented, “The investment needs in energy infrastructure in the upcoming decades are tremendous. This project will help to better understand existing and emerging risks, as well as risk management approaches available to investors.”
Alex Wittenberg, executive director of Marsh & McLennan Companies’ Global Risk Center, said, ”As the infrastructure for energy supply and demand continues to develop around the world, it will be critical to strengthen its resilience in order to withstand and mitigate risks so that supply to support economic growth can be ensured. This project will develop insights necessary to build a future-proof energy infrastructure.”
Over the next year, the knowledge network’s high-level members from across the world, consisting of senior experts from the finance and energy sector globally, will meet at roundtables and workshops focused on addressing the issues affecting the resilience of energy infrastructure investments. The energy and finance industry will be able to use the findings to inform future investment decisions.