The thorny issue of free energy markets

A consensus has emerged at the World Energy Congress on three goals for the future of energy, Pierre Gadonneix, Chairman of the World Energy Council and honorary chairman of French utility Electricité de France. It needs to support economic growth, reduce pressure on the environment, and reduce social inequality around the world.

These three goals require the development of new, more sophisticated and safer technologies, which in turn requires more investment that is likely to impact costs, he said. Free trade in energy would go a long way to meeting the goals, Gadonneix argued, by making energy more readily available, by promoting economies of scale and reducing costs, and by facilitating the transfer of technology.

Yet, the energy sector is one of the most protected worldwide, and protectionist measures have worsened since the onset of the financial and economic crisis two years ago, he said. Canada, with more energy resources than it needs for itself, is keener than most to maintain open energy markets. Some 20 percent of Canada’s exports are in the energy sector, said Trade Minister Peter van Loan (on right in the photo).

Pascal Lamy (left in photo), head of the World Trade Organization, agreed that more predictable and transparent international rules could benefit both countries which produce and those that consume energy, but warned the industry not to expect too much. There have been previous attempts to liberalize energy trade, at least since the 1970s, and all have failed, he noted.

The WEC’s three main goals of energy accessibility, availability and acceptability require energy solutions that are both long-term and sustainable, and this means that social and environmental concerns must be at the heart of our future energy system, he said, speaking by video from the WTO head office in Geneva.

“The answer can only be energy efficiency, more renewables and changed lifestyles,” Lamy added.