“One of the foremost challenges facing the energy sector in the coming years will be to secure the enormous resources required to finance vital investments”, said Ignacio Galán at the World Economic Forum (WEF) in his capacity as Chairman of the Energy Utilities Community. 

Speaking at a panel discussion titled The New Energy Context, held this morning in 2015 Davos, Mr. Galán explained that “world electricity demand will grow by 80% over the next 30 years driven by improved efficiency and the expansion of the service to those 1.3 billion people who still do not have access to power.”

He went on to say that "although the sector has the technological capability to meet this growth, while at the same time offering a safe, sustainable and competitive supply", over US$20 trillion will nonetheless be required in investments between 2014 and 2040, according to the International Energy Agency.

With a view to improving the 'investability' of the sector, the Chairman of IBERDROLA called for stable policies and regulations.  In this regard, he emphasised the need to "draw up properly targeted energy plans, identifying needs and the most suitable technological solutions; create mechanisms to guarantee adequate compliance; and approve carefully designed, stable and predictable regulatory frameworks that provide clarity for investors".

Ignacio Galán claimed that "if these conditions are met, then investments will be forthcoming", citing the example of the energy reform launched in Mexico by President Peña Nieto.  And this “will be advantageous for consumers, who will benefit from a better service at a competitive price, and for society at large, on account of the huge economic impact the sector has in terms of creating wealth and jobs".

He also stated that electricity utilities such as IBERDROLA “have played a key role over the past decades developing technological solutions and investing both in renewable energy and bulk transmission networks.”

Europe needs an Energy Union

Mr. Galán reiterated today that in order to be able to compete on a level playing field with the rest of the world "Europe needs an Energy Union with a single regulatory body and a common set of rules" and trusts that Europe’s new Commission, which has appointed a specific vice-president to address this issue, “is developing this concept and will act soon”.

As Mr. Galán went on to explain, there are a number of circumstances that are hindering the competitiveness of the European economy compared to others such as that of the U.S.

For example, despite the fact that "energy prices have dropped, the costs have gone up in the last few years because of the inclusion of environmental and social costs unrelated to the electricity supply, which account for over 50% of bills”.

Moreover, "the markets have not adapted to the mass-scale penetration of renewables and back-up technologies are not receiving the right remuneration".  This has led to the closure of efficient, modern facilities with an installed capacity of 70 GW. Finally, he pointed out “the current prices for CO2 are too low to drive technological change”.

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