IEA Director, Industry Leaders Call Electricity the Lifeblood of the Information Age

Robert Priddle, Executive Director of the Paris-based International Energy Agency, joined the leaders of four international electricity associations in a joint statement issued today at the “Electricity: the new millennium” conference in Montreal.

The statement described electricity as the lifeblood of the advancing Information Age. At the same time it pointed out that more than 2 billion people still do not yet enjoy the most basic benefits of electricity – reducing manual labour, enabling education, increasing productivity and improving the quality of life.

This unique meeting brings together the Edison Electric Institute, the Union of the Electricity Industry – EURELECTRIC (formed from the merger of UNIPEDE and EURELECTRIC), the Canadian Electricity Association, the Federation of Electric Power Companies of Japan, in co-operation with the International Energy Agency, as well as many other distinguished participants from around the world.

Together, these organisations affirm a common goal of providing reliable, reasonably priced electricity to meet growing needs in an environmentally responsible and economically sustainable manner. Electricity is uniquely qualified in meeting the twin goals of environmental stewardship and economic development for a growing world population.

The organisations jointly agree on a set of key conditions and principles that should be recognised by the industry, policy makers and regulators to ensure that this common goal can be broadly achieved. These include:

• A reliable, affordable and environmentally responsible supply of electricity is fundamental to every nation’s ability to meet the legitimate quality of life aspirations of its citizens. Without this basic element of modern society, disparities among the world’s population will increase, leading to undesirable industrial and social effects in nations throughout the world.
• Governments should provide policy frameworks best characterised by open markets and avoidance of measures that distort those markets. Recognising individual characteristics of their nations, policy makers and regulators should resist pressure to create specific outcomes where there is a consensus that markets, rather than regulation, can best achieve desired outcomes. They should rely on these markets to develop new, efficient solutions.
• Regulation of remaining monopoly components should recognise the need for long-term investment to develop, maintain and expand electricity systems to the benefit of customers. Competitive returns on investment are necessary to encourage innovation and development of robust, reliable electric systems.
• Development or expansion of electricity production or delivery systems requires governments to establish sound frameworks to encourage investment. Actions may include strategies and mechanisms to moderate the higher risks often present in developing countries in order to provide electricity at reasonable prices.
• Electricity remains the most versatile form of energy, offering the potential for production from many forms of indigenous and renewable energy sources both in grid-based and standalone settings. Policy makers should recognise the value of maintaining fuel diversity in supporting electric system economy and reliability.
• Governments and industry must continue to work co-operatively in the development of low-cost, efficient and reliable technologies for production and delivery of electricity. Long-term public and private investment in technology research and development is essential and provides a valuable area for co-operation between government and industry.
• New and promising technologies may require special support to overcome hurdles based on technical development or economic scale in order to compete with historic technologies. However, experience has shown that mandating purchase or specific levels of market share tend to increase customer costs or distort the efficiency of electricity markets.
• Where societal goals, such as environmental protection, must be translated into costs reflected in the marketplace, governments and industry should strive together to find efficient, market-oriented solutions.

In order that the valuable exchange of ideas and experience among the leaders of the electricity industry gathered in Montreal not be lost, the sponsoring organisations pledge themselves to expand co-operation in support of these principles and concepts for the advancement of their members, customers and economies.