“Although the rate of increase is likely to slow for energy demand, a number of public and private institutions expect that global energy demand will continue to increase for the foreseeable future. Most of this growth is likely to come from non-OECD countries,” Dr Alexandra Heath has told a CEDA audience in Sydney.
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Speaking at the NSW Energy Series: Future energy projects event, Reserve Bank of Australia, Head of Economic Analysis, Dr Alexandra Heath offered a global perspective to the future of energy demand in Australia.
“According to the IEA (International Energy Agency), around 27 per cent of global energy consumption has been covered by some form of mandatory energy efficiency regulations in 2014 – this is about twice as much as it was a decade earlier.
“The IEA has estimated that the improvements in energy efficiency meant that global energy consumption in 2014 was about one-third less than what it would have been had those policies not been in place.
Dr Heath said the price of energy has fallen which has also posed challenges for less efficient energy producers.
However, she said: “Technological change has made it easy and affordable to access energy reserves that were previously deemed to be economically unviable – a prominent example of this is the boom in shale oil and unconventional gas in the United States and other countries.”
Commonwealth Bank of Australia, Managing Director Infrastructure and Utilities, Michael Thorpe highlighted the origins of funding for renewable energy in Australia, in particular for wind farms.
“There’s been enormous investment in the wind farm sector in the last 10 years.
“If we break down the data set slightly into how the funding is being put in place, it can be split between corporate funding and project finance… what we can see is project finance has been the dominant funding source for the last three to five years.
“Project financing allows companies to develop assets larger than themselves by transferring risk to third party counterparts,” Mr Thorpe said.
AGL Energy, Chief Financial Officer, Brett Redman also highlighted the problems of energy oversupply facing companies investing in renewable energy, however deemed it necessary for the future of energy consumption in Australia.
“It’s time to refresh the fleet,” Mr Redman said.
“We are ready to upgrade and update the fleet.”