Governments to prioritise energy affordability and security

Certain challenges are driving politicians to connect energy policy with economics and security.

Following the 2024 elections held in various countries, governments are expected to give more more attention to energy affordability and security, according to Boston Consulting Group (BCG).

“Concerns about supply disruptions, exacerbated by ongoing conflicts in Ukraine and the Middle East, had an unsettling effect on many voters and government leaders, especially in economies—such as those in the EU, the UK, India, and South Africa—that rely on energy imports,” a BCG report said.

Politicians are also driven by demand changes and grid limitations to link energy policy with macroeconomics and national security as they seek to ensure power remains accessible and affordable.

BCG expects “governments with climate ambitions to place greater emphasis on the role that low-carbon energy sources can play in delivering on those objectives whilst managing the risk of the transition.”

To support their transition goals, BCG said governments should resolve fiscal, economic, and equity implications.

The report noted that funding comes from taxpayers and consumers which have different policy considerations.

“Resolving this question is key to ensuring that the transition will progress without increasing economic inequality or eroding voter support for climate policies,” BCG said.

Governments are expected to prioritise investment in technologies and industries that will drive economic competitiveness. This will require “immediate attention, innovative thinking, and enhanced collaboration amongst governments, regulators, private investors, banks, and international institutions,” BCG said.

“Over time, these trends may lead to a more fragmented approach to energy policy development globally, with each country prioritizing its own dominant industry players,” the report read.