“The economy will be 33% more productive from an energy point of view”, says Michael Liebreich

  • The expert in energy transition and mobility, and founder of Bloomberg New Energy Finance, launched a series of high-level talks earlier today on the economic, technical and scientific conditions envisaged for the energy future.
  • The Chairman & CEO of Naturgy, Francisco Reynés, said that “the challenge for the energy sector will be to find sustainable solutions and overcome obstacles that might arise along the way”.

The Naturgy Foundation held the first of its ‘Energy Prospectives’ events earlier this morning at the IESE Business School in Madrid with the expert in energy transition and mobility, and founder of Bloomberg New Energy Finance, Michael Liebreich, and the former Minister for Industry and Energy, Claudio Aranzadi.

Speaking about global trends in clean energy and mobility, Michael Liebreich began his talk by predicting that “by 2040, one-third of all electricity worldwide will be generated through the solar and wind power mix, one-third of all vehicles on our roads will be electric and the global economy will produce one-third more gross domestic product (GDP) per unit of energy”. The expert believes that the number of renewable energy facilities has not stagnated and the cost of building them has fallen. “The switch to renewable energies will be bigger than the switch from coal to gas”, he said.

He then went on to highlight how the price of gas has fallen and its use is increasing globally without replacing coal. “Gas is playing a different role. It will provide more flexibility, essential for the energy transformation”, he said. He stressed that gas has a lower carbon footprint than coal and offers economic and geopolitical benefits.

Michael Liebreich believes that “the electricity system can be effectively transformed if decisions are taken on distributed, not centralised, generation”. He also underlined the need for digitalisation. “We have to consider the possible technologies: biomass, biogas… It should all be digitalised”, he said. In this regard, he believes that “the economy will be 33% more productive, in terms of energy”.

The founder of Bloomberg New Energy Finance said he strongly believes that zero net emissions will be achieved. “It might take us a while, but I’m convinced we’ll get there quickly. Electricity will be carbon-free by 2027”, he said. For that to happen, such sectors as land-based transport, aviation and agriculture must now switch and clean energy must become more accessible.

Michael Liebreich also spoke about electric vehicles in his talk. “They could potentially be a problem, but also an ally. Electric vehicles will be genuinely important for the automotive industry and I estimate that prices will become competitive by 2026. It should be remembered this industry needs investment”, he said.

Francisco Reynés, Chairman & CEO of Naturgy, also spoke at the opening ceremony and said he was pleased with the turnout for this first ‘Energy Prospectives’ event. “It has exceed our expectations. The debate around energy is not just of interest to those of us involved in this business. It transcends the energy sector to reach industry, the economy and well-being in general”, he said.

Talking about the current situation, the Chairman & CEO of Naturgy said that “the challenge for the energy sector will be to find sustainable solutions and overcome obstacles that might arise along the way”. In this regard, Francisco Reynés highlighted the changes and uncertainties in the sector. “There are three uncertainties: creating an environmental energy plan; for that plan to be economically and socially sustainable; and doing so at competitive costs. We need to look for sustainable solutions while taking those three factors into consideration. Within the European Union, countries are already starting to identify specific energy model transformation plans that are compatible with these future proposals”, he said.

The Chairman & CEO of Naturgy was accompanied at the opening ceremony by José Luís Suárez, Managing Director of the IESE Business School in Madrid, who underlined the importance of the energy transition now. “We live in a CO2 economy, which poses an unprecedented challenge. It also has a cross-cutting effect on society, which is increasingly more sensitive to environmental and climate change issues”, he said.

Dilemmas, uncertainties and opportunities from the energy transition

After Michael Liebreich, the second speaker at this first ‘Energy Prospectives’ session was the former Minister for Industry and Energy, Claudio Aranzadi. In the debate, he proposed thinking about the costs of emissions reduction, the future of regulation in the electricity sector and geopolitical impacts in the oil and energy sector.

Claudio Aranzadi summed up the energy transition target as net emissions by 2050 and referred to decarbonisation. “Of the 38 technologies needed to achieve that by 2050, only four are mature. Competitive costs are very limited. Within decarbonisation, static costs are guaranteed and real. They are negative in net terms, but they must be borne at present. They need to be considered as advantages for the future. Energy and environmental benefits are uncertain and long-term”, he said.

The former Minister for Industry and Energy made a forecast for 2050. “By then, there will be a significant penetration of distributed generation, with an increase in digitalisation and decarbonised storage technologies”, he said. In terms of his opinions about the influence of oil, he said “oil demand forecasts for 2040 stand at 100 million barrels per day. This is incompatible with decarbonisation plans. Furthermore, there is a need for greater investment”.

In turn, IESE professor Xavier Vives, who moderated the Q&A session with the audience, spoke about the technological and energy uncertainty. “In any transition, we will need to see how energy prices evolve, it will greatly depend on the producing countries and their needs. The opportunity costs of these technologies will depend on those specific circumstances”, he said.

The event was brought to a close by José Luís Suárez, Managing Director of the IESE Business School in Madrid, and Rafael Villaseca, President of the Naturgy Foundation, who explained that the Naturgy Foundation decided to set up these debates for discussing the future in response to the transformations of the last decade “dominated by environmental, technological and social change”. “The problems will not be resolved by simply setting targets, we need to talk about how to achieve them”, he said.

‘Energy Prospectives’: new series of high-level talks

In partnership with the IESE Business School, one of the leading business schools, the Naturgy Foundation launched ‘Energy Prospectives’ earlier today, a series of high-level talks by national and international experts on the economic, technical and scientific conditions envisaged for the future of the energy sector aimed at a small group of business, executive and academic experts.

Over three sessions in 2019 (March, June and October), ‘Energy Prospectives’ will gather figures of recognised international standing because of their experience, vision and knowledge of the energy sector.

The Naturgy Foundation and its mission to train and raise social awareness

This project forms part of the education and awareness-raising programme being carried out by the Naturgy Foundation on issues related to current affairs in the world of energy and the environment. Its fundamental goal is to foster a rational use of energy resources and encourage sustainable development; in other words, improved energy efficiency and technological innovation in the field of energy in a way that complements environmental respect and protection.

Set up by the power company in 1992, the Naturgy Foundation is also engaged in social action programmes both nationally and further afield, by influencing particular initiatives aimed at alleviating energy vulnerability. In terms of culture, it promotes initiatives geared towards both preserving and communicating the historical heritage of the gas and electricity sector.