Smart business leaders understand that the decisions you make right now regarding energy management will play a fundamental role in the success of your organization today. But those that want to be assured of long-term, sustained growth understand that it is just as important to look ahead as it is to look at current events.
By taking the time to educate yourself on the ways in which the energy industry is poised to change in the coming years, you’ll be able to stay ahead of every bend in the road, adjusting more easily as conditions change.
Recently, DNV—a global quality assurance and risk management organization—released an independent study entitled “Energy Transition Outlook,” diving into what the energy industry will look like in the year 2050.
Even if you have visions of retirement that begin well before that point in time, many of the fundamental shifts addressed in this study are already underway today. Let’s take a closer look at DNV’s research below to see how you may want to prepare your business for 2018 and beyond.
Electric vehicle adoption to shrink demand for oil and gas
Electric vehicles (EVs) have been slow to reach mainstream adoption, but they may be the status quo before long. China has already announced a plan to ban all gas and diesel vehicles. Britain has a similar plan in place that begins in 2040.
According to DNV’s report, the increasing adoption of EVs in the coming decades is poised to shrink demand for oil and natural gas, while increasing competition at the same time. By 2050, DNV estimates that oil and gas will represent only 44 percent of the global energy supply, down from 53 percent today.
Business leaders should consider their energy portfolios as this re-stratification of energy sources occurs—but it’s also a lesson for any manager with a large fleet of vehicles to maintain too.
Natural gas to claim—and lose—helm as largest energy source
Over the past several years, the United States has shaken up the global energy market by expanding natural gas extraction and beginning exports to Mexico and Europe. This trend is expected to continue unimpeded for the next few decades, according to DNV’s report.
By 2034, natural gas is anticipated to be the largest global energy source. Gas is then expected to hold that position through 2050, despite a decline that begins by 2040.
Renewables come to the forefront as viable alternatives
With both oil and natural gas losing footing in the year 2050, it is renewable energy that is expected to pick up the extra slack. Adoption is anticipated to accelerate in the coming years as consumer-scale photovoltaic solar becomes more cost-competitive.
As far as your own investments go, DNV expects that having a portfolio of network projects like home-installations could become more valuable than large-scale projects, due largely to the expansion of renewables.
Further accelerating the rate of renewable adoption is the continued digitization of the electric grid. By expanding connectivity these projects will exponentially increase efficiency and agility to address demand in real-time.
Your Next Steps
Now that you have a better idea about where the energy markets will be heading in the years to come, you’ve got to ask yourself one question: “What next?”
At Constellation, we have all the tools and experience needed to craft a long-term energy management strategy that will allow your company to keep ahead of these ever-changing times. To get started, click here.