As the world is recovering from the pandemic, the increasingly high energy prices and the geopolitical tensions in Europe are pushing the energy transition to greener solutions and the economies towards a more sustainable future – while fossil fuels will still be produced in 2040, renewables will account for almost 70% of the world's energy mix.
The digital transformation of the industry is now becoming pivotal, not only for facilitating the extensive use of renewable energy but also for overcoming challenges caused by the increased demand for energy. Technologies like artificial intelligence, blockchain and robotics can revolutionise the way we produce, use and manage energy while also improving the sector in efficiency, safety and sustainability.
Here Templeton & Partners provide the latest UK, European and global market overview of the Energy industry, including:
- Energy Market Update for 2022 and beyond
- Energy Market Key Trends
- Market Focus on Oil & Gas and Renewables
- Global Market Projections for the Future of Energy
- Transition Investments in Energy and Growth Areas
- Digital Transformation Challenges and Opportunities
- Technologies and IT Skills that Drive the Industry’s Transformation
The most recent research and projections from leading publications and institutions, such as the International Energy Agency, Gartner, McKinsey and IRENA, reveal expert insights into the challenges and trends that will shape the future of Energy.
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Energy Market Update 2022
- Global Energy Demand – The exceptional demands on electricity markets around the world in 2021, pushed prices to unprecedented levels and drove the power sector’s emissions to a record high. Strong economic rebound from the pandemic, combined with weather extremes, boosted global electricity demand by more than 6% - the largest in percentage terms since 2010 when the world was recovering from the global financial crisis.
- The Impact of the Crisis in Ukraine – The conflict in Ukraine has roiled the energy markets, driving oil and gas prices to their highest levels in nearly a decade and increasing security-of-supply concerns. However, this could also prompt a long-term shift towards sustainability. Many countries are forced now to reconsider their energy supplies, accelerating the transition towards renewable alternatives, which are more sustainable, safe and cheap.
- Renewable Energy – Electricity produced from renewable sources grew by 6% in 2021, but not enough to keep up with the demand. Renewables, though, are set to grow by 8% per year, serving more than 90% of net demand growth during the period 2022-2024. Meanwhile, nuclear-based generation is set to grow by 1% annually during the same period.
- Oil & Gas – Despite good global progress in the deployment of renewables, industrial processes and domestic heating are still heavily reliant on fossil gas. Whereas in the transport sector, oil continues to dominate.
- Energy Transition – At the start of 2022, the scale of commitment towards the energy transition is stronger than ever before, with approximately 21% of the world’s largest 2.000 companies now committed to net zero net targets.
- Emissions-Reducing Commitments – Leading up to COP26, a total of 64 countries have pledged or legislated, achieving net zero in the coming decades.
- Shifting Energy Mix – Going forward into the future, the energy mix is rapidly moving towards power, sun fuels and hydrogen, which are projected to represent 32% of the global energy mix by 2035 and 50% by 2050.
- New Labour Demands – By 2030, the 1.5°C-aligned energy transition promises the creation of close to 85 million new energy transition-related jobs. The additional 26.5 million jobs in renewables and 58.3 million in energy efficiency, power grids and flexibility will more than offset the losses of 12 million jobs in the fossil fuel and nuclear industries.
Energy Market Trends
- Transitions to Lower Carbon Energy Sources – Fossil fuels in 2019 accounted for around 80% of global primary energy. That share is projected to decline between 60% and 20% by 2050.
- Expansion of Renewable Energy – The declining role of fossil fuels is offset by the rapid expansion of renewable energy (wind and solar, bioenergy and geothermal power). The share of renewables in global energy is estimated to increase between 35% and 65% by 2050.
- Electrification – The increasing importance of renewable energy is supported by the continuing electrification of the energy system. The share of electricity in total final energy consumption increases from around 20% in 2019 to between 30% and 50% by 2050.
- Green Hydrogen Energy – This year, a number of major European energy companies, including Shell and RWE, committed to creating the first major green hydrogen pipeline from offshore wind plants. Meanwhile, the EU has committed to smaller projects aiming to create 40GW of renewable power to be used for green hydrogen generation by 2030.
- Bioenergy – In 2022, there will be an increase in projects looking at new methods of converting biological matter (such as wood, crops or even waste materials) into energy. According to the International Energy Agency, bioenergy will account for 30% of renewable energy production by 2023. Furthermore, it is considered by IPCC to be fundamental to plans to restrict global warming this century to 1.5°C.
- Infratech – Energy transition can be achieved through the integration of technologies - such as blockchain and other distributed ledger technologies (DLTs) - with infrastructure. Along with electrification and efficiency enabled by renewables, hydrogen, and sustainable biomass, Infratech is seen by many as a key driver of the energy transition.
- AI’s Transformative Effects – Artificial Intelligence will play an essential role in the world’s transition to clean energy. These gains in efficiency will be created by more accurate forecasting of supply and demand.
- Industry Challenges – How energy prices and geopolitical and climate crisis will affect the sector’s transition to more sustainable sources?
- Market Key Trends – How the rapid expansion of renewables will impact the global energy mix?
- Drivers for Digital Transformation – Which are the leading drivers of digital transformation in the energy sector?
- Global Market Projections – What’s in the future of electricity, hydrogen, bioenergy, coal, natural gas and oil?
- Energy Digitalization – What are the challenges of the integration of advanced digital technologies into existing infrastructure in energy companies?