TAKING THE PULSE: THE ENERGY SECTOR AND CONCERNS FOR THE ENERGY TRANSITION
Our investigation into the perspectives of energy suppliers, investors and commercial consumers regarding the energy industry and the ongoing energy transition revealed a complex scenario. The findings indicate a global economy confronting numerous and evolving interconnected challenges.
Market stability and infrastructure emerged as top concerns for energy suppliers and investors, with both being highlighted as critical issues by
Overall, what are your top concerns for your energy company's long-term outlook? (energy suppliers and investors)
The heightened focus on stability is clearly a direct response to geopolitical tensions - particularly the ongoing war in Ukraine and the escalating conflict in the Middle East - as well as continued inflationary pressures.
The survey revealed an even distribution of energy suppliers and investors’ concerns across several other key areas.
Regulation and permitting issues and management of the innovation curve were each cited by 45% of respondents as top concerns. Energy suppliers and investors are preoccupied with maintaining and upgrading energy infrastructure, managing operational expenses, and doing so in an often onerous and complex regulatory landscape - while also making long-term strategic investment and technology -related decisions.
Other significant concerns included global competitiveness (44%), political environment (42%) and workforce challenges (42%).
Notably, there was comparatively less concern about the near-term phase-out of incentives and government support despite the number of upcoming elections this year.
Significant concerns included:
Regulation and permitting issues and managing innovation curve challenges
Global competitiveness
Political environment
Workforce challenges
The survey reveals alignment between energy suppliers/investors and commercial consumers regarding the challenges facing the energy transition, with some notable differences in priorities.
What do you view as the greatest challenges impacting the energy transition? (energy suppliers, investors, and commercial consumers)
Both groups overwhelmingly identify operating costs and economic impact as primary concerns
of suppliers/investors
of commercial consumers
Financial considerations remain at the forefront of the energy debate for both groups. Infrastructure inadequacy and capital investment also rank highly for both constituencies. Commercial consumers place a slightly higher emphasis on capital investment (36% vs. 33%).
Energy suppliers and investors show greater concern for geopolitics and energy security (28% vs. 23%). Both groups express similar levels of frustration with political gridlock and lack of legislative clarity.
The lower prioritization of energy inclusivity, AI implementation, and utility-scale storage by both groups could indicate that these are viewed either as secondary concerns or even as potential opportunities in the face of more pressing economic and infrastructural challenges.
It is clear from these findings that the energy transition continues apace internationally. Geopolitical events create inevitable headwinds for efforts to decarbonize but the energy sector has proven itself to be impressively adaptable and committed to the drive towards net zero.
Naturally, this also requires consideration of regulatory needs and the costs of materials and labor on significant projects – which are directly impacting the bottom lines of many businesses. It all suggests a fast-changing space to do business in, and one which requires careful knowledge of the many moving parts to navigate with care.
Richard Cockburn, U.K. Sector Leader - Energy & Natural Resources
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