Cambridge Energy Research Associates: CERAWeek 2016 Daily Summary: Thursday, 25 February

The CERAWeek 2016 Thursday concurrent Strategic Dialogue Breakfasts addressed the uncertainty of the US Clean Power Plan, electricity consumers' wants, Texas's electric power future, the changing face of fuel competition in Asia, North American power's fuel logistics, and Latin America's and Europe's transition to renewables.

Eduard Sala de Vedruna, IHS Senior Director, chaired the Strategic Dialogue Breakfast "How Europe Is Managing Its Energy Transition: Lessons Learned." The panel comprised Michel Derdevet, Secretary General & Member of the Board, ERDF; Holger Lösch, Member of the Executive Board, Federation of German Industries; Jeannette Smits van Oyen, Head of EMEA Utilities Investment Banking, JP Morgan; and Laurent Yana, Vice President Strategy, Engie. The panel discussed the main impacts of 266 GWh of renewables capacity additions in European power markets since 2000. The panel agreed that technology, regulation, networks development, and data management will be the key points on which to focus to continue this ongoing energy transition.

Lawrence Makovich, IHS Chief Power Strategist and CERAWeek Vice Chairman, led Thursday morning's North American Power CEO Plenary. Joining him were Nick Akins, Chairman and CEO of American Electric Power; Christopher Crane, President and CEO of Exelon; and Thomas May, Chairman and CEO of Eversource Energy. The panel focused on defining the utility of the future and touched on topics ranging from infrastructure security and net metering to the need to address customers' evolving preferences for power consumption. The panelists agreed that cyber security and hardening infrastructure are the most important issues in the near term. The role of technology in developing new types of resources and also increasing reliability will shape the conversation through 2020. The panelists concluded that net metering policy needs to be fair to all customers; and while the industry is moving to cleaner resources, there needs to be a balanced generation portfolio.

In Thursday's Power Markets, Policy, and Technology Plenary, Carlos Pascual, Senior Vice President, Global Energy, IHS, highlighted how a number of forces, including the Paris climate agreement, are changing the way energy is produced. Lisa Davis, Member of the Managing Board, Siemens, said she expects that the global energy system will change at an even faster pace as a result of the Paris agreement and that there will be even more interest in wind and solar. Enrique Ochoa Reza, Chief Executive Officer, Federal Electricity Commission of Mexico, said that Mexico is encouraging the private sector to build natural gas pipelines. He said that Mexico's power industry is using more gas and less fuel oil, which is relatively expensive. Mohamed Al Hammadi, Chief Executive Officer, Emirates Nuclear Energy Corporation, said that the UAE is building nuclear power capacity to provide base-load electricity and that nuclear represents a clean and reliable option for generating power.

IHS Vice Chairman Daniel Yergin opened the Thursday morning Global Power Dialogue session by welcoming Zhenya Liu, Chairman of the State Grid Corporation of China. Mr. Liu highlighted China's commitment to clean, renewable energy. He said that the abundance of renewable energy is helping China and other countries by decreasing energy costs and boosting other industries. He also focused the discussion on the Global Energy Interconnection plan to use ultrahigh-voltage technology to create strong and smart grids.

Alex Klein, IHS Senior Director, chaired the Strategic Dialogue "Renewable Power: Expectations for Scale." He was joined by Elizabeth Littlefield, President and CEO, Overseas Private Investment Corporation; Mike O'Sullivan, Senior Vice President, NextEra Energy Resources; Irene Rummelhoff, Executive Vice President, New Energy Solutions, Statoil; John Woolard, Vice President, Energy, Google; and Tom Werner, President and CEO, SunPower. The panel discussed the importance of cost reductions for renewable technologies and also the drivers and changes in the renewables sector.

Doug Giuffre, Director, North American Power Market Fundamentals, IHS, led the Strategic Dialogue "Electric Market Structure: Continued Evolution." The session addressed the changing landscape of US power markets, how these markets are responding strategically, and what may be on the horizon. Joining him were Cheryl LaFleur, Commissioner, Federal Energy Regulatory Commission; Andy Ott, President and CEO, PJM Interconnection; John Bear, President and CEO, MISO; and Bill Magness, President and CEO, Electric Reliability Council of Texas.

In other midday Strategic Dialogues, presenters and delegates discussed coal's future, power system and grid challenges, financing electric power, factors affecting the power generation mix, and power technologies' role in addressing climate change.

Daniel Yergin chaired the Thursday Luncheon and Keynote given by Norman Bay, Chairman, US Federal Energy Regulatory Commission (FERC). Lawrence Makovich also participated. Mr. Bay said that the US energy market is undergoing a transformation for a number of reasons, including the development of shale gas resources, renewable power generation growth, sluggish electricity demand growth, and technological innovation. The FERC's role is to help both industry and society manage this period of transition in energy markets, using the tools provided by Congress. He said the FERC must continue to focus on promoting market efficiency and ensuring grid reliability, including through infrastructure development.

Carlos Pascual, moderated Thursday afternoon's Climate Change Plenary: What's Ahead? with panelists Anita Marangoly George, Senior Director, Energy & Extractives, the World Bank Group; Didier Holleaux, Executive Vice President, Engie; and Robert Orr, UN Special Advisor on Climate Change and Dean of the School of Public Policy at the University of Maryland. The panel focused on the 2015 Paris climate talks, policy tools and technology needed to address climate change, and the challenges and solutions to increasing energy access in the developing world. The panel concluded that leadership, proper information, and market signals are necessary to address climate change. Additionally, they agreed that energy efficiency can play a key role in reducing emissions. Lastly, they noted that local realities matter for each region's approach to addressing climate change, and industry needs to be involved to achieve successful and sustainable reductions in carbon emissions.

IHS Vice Chairman Daniel Yergin welcomed His Excellency Paul Kagame, President of the Republic of Rwanda, at a Presidential Dialogue on Thursday afternoon. President Kagame emphasized that Rwanda is one of the fastest growing economies in the world and thus has a great need for sustainable energy solutions. The question and answer session provided further details on Rwanda's energy sector, the role of the private sector in energy development, regional integration with neighboring countries, and the several policies in place to encourage economic growth in Rwanda.

Jone-Lin Wang, Vice President and Head of Research and Consulting, Power, Gas, Coal, and Renewables-Americas, IHS, led the Infrastructure and Technology Plenary: The Shape of Things to Come. Joining her were Steve Bolze, President & CEO, GE Power; Russell K. Girling, President & CEO, TransCanada; Kim Greene, Executive Vice President and Chief Operating Officer, Southern Company; and Hirohide Hirai, Director-General, Agency for Natural Resources & Energy, METI (Japan). The panel spoke broadly about the future of power technologies. The discussion focused on the need for a diversified portfolio of electricity generation, and the path to de-carbonization through technologies beyond just renewables, including digitization. Nuclear, gas, and coal with carbon capture will all be part of a lower- carbon future, according to the panel.

At Thursday night's Dinner and Technology Keynote, Daniel Yergin and JB Straubel, Chief Technology Officer, Tesla Motors, discussed Mr. Straubel's background and experiences, the early days at Tesla, and his career path. Mr. Straubel offered suggestions for young engineers and entrepreneurs while also discussing Tesla's challenges and accomplishments, and the new battery technologies and other technologies currently being developed by Tesla.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.