The Geopolitics of Renewable Energy
For a century, the geopolitics of energy has been synonymous with the geopolitics of oil and gas. However, geopolitics and the global energy economy are both changing. The international order predominant since the end of World War II faces mounting challenges. At the same time, renewable energy is growing rapidly. Nevertheless, the geopolitics of renewable energy has received relatively little attention, especially when considering the far-reaching consequences of a global shift to renewable energy. The paper starts with a discussion of seven renewable energy scenarios for the coming decades: the IEA’s World Energy Outlook 2016, the EIA’s International Energy Outlook 2016, IRENA’s REmap 2016, Bloomberg’s New Energy Outlook 2016, BP’s Energy Outlook 2016, Exxon-Mobil’s Outlook for Energy 2016 and the joint IEA and IRENA G20 de-carbonization scenario. The paper then discusses seven mechanisms through which renewables could shape geopolitics: Critical materials supply chains, technology and finance, new resource curse, electric grids, reduced oil and gas demand, avoided climate change, and sustainable energy access.
Myanmars Attractiveness for Investment in the Energy Sector: A Comparative International Perspective
This report examines the strengths and weaknesses of Myanmar’s business climate in the petroleum and renewable energy sectors: how it compares with other countries, especially in ASEAN; what matters to foreign investors; and how this situation can be improved. Not resting on one’s (new) laurels: The recent international interest in Myanmar may prove counterproductive for the country’s investment climate, if this upsurge in interest induces the government to slow down in its reform efforts. When the novelty of Myanmar wears off, that may become a problem. Indeed, possible signs of such a slowdown can be observed already. According to official data, FDI in Myanmar decreased significantly in the first four months of 2016 compared to the same period in 2015. Investors were increasingly cautious and worried about the slow pace of reform, delays in establishing a panel to approve new investment projects and the lack of clarity on the country’s new economic development strategy (DVB, 2016). This highlights the importance of working constantly to improve the investment climate and staying in close contact with investors, keeping them informed about developments. Challenges common to the petroleum and renewables sectors: Lack of data and information for market entry; fragmented institutional and regulatory framework; low levels of electricity access and digitalization; low international oil prices. Challenges in the petroleum sector: Limited supply-industry infrastructure and lack of local engineers; MOGE petroleum sector monopolization and conflicts of interest; limited geological data; complicated taxation; weak government–business communication; challenges in finding local partners; time-consuming licensing procedures; paper-based communication and lack of e-government; production-sharing agreements biased towards participation of large oil companies, excluding smaller ones; frequent changes in legislation; closed downstream market. Challenges in the renewable energy sector: No national target or legislation on renewable energy; no dedicated public agency regulating the sector; lack of business associations; subsidies for grid electricity generated from fossil fuels disadvantage off-grid renewables; access to suitable land; complex mountainous terrain and protected areas as well as political instability in these areas; underdeveloped grid system for large-scale production; lack of data on the renewable-energy resource potential; limited infrastructure for technical support and maintenance; high cost of installing solar panels and wind turbines; disintegrated biofuel production and supply markets; lack of local specialists; no taxation system for renewables; security risks in conflict-prone Kachin, Rakhine and Shan states. Opportunities in the petroleum and renewable energy sectors: Government commitment to reform; advantageous location as part of the Greater Mekong Subregion and ASEAN, close to the Chinese and Indian markets; significant resource base, especially natural gas, hydropower and bioenergy; rapidly rising energy demand in Myanmar and neighbouring countries; high demand for investment in refineries, oil terminals, oil barges and petrol stations; opportunities in retail business; new petroleum and renewable energy laws are underway; abundant semi-skilled labour, and low cost of unskilled labour; low levels of corruption and criminality. Initially, companies may perceive the business climate as unpredictable, but, having entered the market, and having learned and adapted to local conditions, companies experience greater predictability. Opportunities in the petroleum sector: Relatively transparent tender system; equal treatment of investors; government experience and capacity; market maturity. Myanmar’s strategic location, with rapidly rising energy demand among hundreds of millions of people in the neighbouring countries and low transportation costs (especially for gas delivery to China, India and Thailand), represents an opportunity to foreign investors. Opportunities in the renewable energy sector: Latecomer advantage; low level of electrification increases cost advantage of off-grid electrification; support from international donors; strong civil society actors are promoting renewable energy development.
Renewables change geopolitics
In cooperation with IRENA, Harvard University and Columbia University, NUPI this week publish a report exploring the opportunities and challenges renewables have on geopolitics.
The UK withdrawal from the EU - Legal implications for Norway as party to the EEA Agreement
By leaving the European Union, the United Kingdom withdraws from all EU international commitments. The disentanglement of the UK from the EU, Brexit, will thus affect third states and organisations with which the EU entertains relations. Norway will be no exception, particularly in view of the many agreements the country has concluded with the EU, covering a wide range of areas and entailing a high degree of integration with the Union’s legal order, the EEA being the most important of these agreements.
What you need to know about the elections in Iran
Iranian presidential and local elections will be held on 19 May. Senior Advisor Joachim Nahem (NUPI) clarifies some important questions.
Iceland’s Relations with its Regional Powers: Alignment with the EU-US sanctions on Russia
The paper examines the Icelandic government’s consideration to withdraw its support for the sanctions against Russia over Ukraine in 2015. The consideration came as a surprise to many since Iceland in the past has habitually aligned itself closely with the United States and the European Union in such matters. The Icelandic fishing industry lobbied hard for the sanctions to be lifted to avoid Russian counter-sanctions on Iceland. After considerable internal debate, the government decided to uphold the sanctions, but settled on a policy of not taking part in EU´s foreign policy declarations about the sanctions. This move is interesting given Iceland’s traditional positioning between two gravitational centres in world politics: the EU and the US. The paper discusses what this case tells us about Icelandic policymakers’ room for maneuvering in the formulation and enactment of its foreign policy, and about Iceland’s foreign policy bonds to the US and the EU.
New Study: Illicit Financial Flows in Developing Countries Large and Persistent
Illicit financial flows (IFF) from developing countries are increasing and the numbers are large; approximately 1 trillion US$ in outflows was estimated in 2014 alone.
The Bear and the Triangle
What shapes EU policy towards China? This is the topic for NUPI Research Fellow Bjørnar Sverdrup-Thygeson's new article.
Iceland’s Relations with its Regional Powers: Alignment with the EU-US sanctions
The paper examines the Icelandic government’s consideration to withdraw its support for the sanctions against Russia over Ukraine in 2015. The consideration came as a surprise to many since Iceland in the past has habitually aligned itself closely with the United States and the European Union in such matters. The Icelandic fishing industry lobbied hard for the sanctions to be lifted to avoid Russian counter-sanctions on Iceland. After considerable internal debate, the government decided to uphold the sanctions, but settled on a policy of not taking part in EU´s foreign policy declarations about the sanctions. This move is interesting given Iceland’s traditional positioning between two gravitational centres in world politics: the EU and the US. The paper discusses what this case tells us about Icelandic policymakers’ room for maneuvering in the formulation and enactment of its foreign policy, and about Iceland’s foreign policy bonds to the US and the EU.
Asia – Transcending the Middle-Income Challenge
NUPI has the pleasure of hosting the presentations of this year’s Asian Development Outlook. What challenges are middle-income economies facing?