Stakeholder Engagement and the Energy Transition

Source: 6/13/2024, Location: Asia

As we navigate the energy transition, making sure we bring stakeholders with us on the journey will be vital – whether this means government ministers, or the end consumer, everyone has their part to play. At the AIEN International Energy Summit in Bangkok, Thailand, this subject formed one of our panel discussions, called ‘Stakeholder Engagement and the Energy Transition.’

Moderator Michael George DeSombre, United States Ambassador (Ret), Partner, Sullivan & Cromwell, started off with the most deceptively simple of questions: ‘what is stakeholder engagement?’

‘This isn’t a helpful definition,’ said Matthew Wittenstein, Chief of Section, Energy Division, UNESCAP, ‘but we’re all stakeholders. You can break this down into two categories – those invested/investing in a project; and those directly or indirectly impacted by it.

‘For example, for a grid, you have to physically build it, sometimes through someone’s backyard. And then the people receiving the power are also stakeholders. Consumers might also have an opinion on their own level of comfort when receiving power from another country as they have concerns over energy security. And then there are the ones who make a project happen – the workers and financiers.

‘Stakeholders are not at the top of the food chain in terms of decision-making but along the way they need to have their voices heard. Often, they are not effectively included.’

Michael agreed with this. ‘In terms of stakeholder engagement, we need to think about the impact on people. It is all well and good to tell people they have to move to renewables, but who is actually paying for this without putting consumers in poverty?’

Paul Everingham, CEO, Asia Natural Gas & Energy Association (ANGEA), looked at this from the point of view of Carbon Capture and Storage (CCS).

‘If nations were randomly popping up CCS projects with no planning, this wouldn’t bring the cost down to make them economically viable. If we had a handful of major hubs that were sufficiently big at scale, the cost would be on the capture end and this would be on the industry, not the consumer.’

And this is where, Paul said, governments and the industry need to work together as stakeholders.

‘Could there be subsidies from the government for the capture component? Possibly. But the major cost will be on the emitter. The onus would be on the industry, but we can’t afford not to do it. But if governments are telling us we have to do this, they will need to subsidize aspects of the supply chain. So, the ultimate impact to the end user should be minimized.’

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