The energy sector is on the brink of a multidecade transformation with the Energy Transition in sight. While that alone makes it worth your while to follow along closely, this shift is also noteworthy as it’s taking place in an era where the world has become increasingly connected — both socially and economically. The changes we’re about to witness will not only impact personal economic well-being throughout the globe, but also how we interact and communicate with one another.
Since the industrial revolution, fossil fuel has been at the core of the global energy sector. Yet, today, increased regulation and public concern over climate change is prompting a shift away from fossil fuels and towards renewables. This shift is being driven by a number of factors. One of these is electrification, which is occurring as countries develop, populations expand, and economies grow. Declining costs for renewable energy technologies are also prompting a shift to renewable energy systems among established players in the industry, while digital technologies are helping new market entrants to pioneer innovative approaches to energy storage and distribution that challenge energy companies’ traditional business models.
Product of this shift, the term ‘Energy Transition’ is born. Energy transition refers to the global energy sector’s shift from fossil-based systems of energy production and consumption — including oil, natural gas and coal — to renewable energy sources like wind and solar, as well as lithium-ion batteries.
Energy Transition: Benefits for Energy Companies
There are numerous benefits associated with the energy transition. For Energy Industry players that are looking to improve their portfolio and credits, as well as act in line with the demands of governments and organizations; getting involved in the Energy Transition is a must.
Some results of the energy transition are expected to be:
- lower greenhouse gas emissions,
- more renewable energy sources,
- a wider range of energy infrastructure,
- fewer power outages and cheaper costs.
How are Investments for Greener Alternatives Developing?
Increasingly, investors are focusing more and more on the impact their investments have on the world around them. Cleaner energy drives innovation and is proven to be a safer long-term investment. Entrepreneurs on the brink of ground-breaking ideas in clean energy will be spearheading a global transition from fossil fuels to zero-carbon sources that could increase GDP by up to 10% and benefit the lives of 1 billion people by the year 2050, according to new analysis from The Energy Transitions Commission (ETC).
Product of all this, renewable energy providers do not rely only on regulation for growth but also on investment capital. Results can be seen in the cost of both solar and wind energy, which have fallen drastically, making it a choice for consumers too.
How are the perspectives of company executives and shareholders changing
It is important to remember that Energy companies are those enabling the Energy transition. For big investments to be made in partnerships, new technology, research, etc., it is important for higher management and shareholders to believe in the potential greener alternatives have for the future of the company, the industry, communities, and the planet.
A survey performed by Deloitte shows energy transition remains a priority for companies. Eighty-nine percent of executives in the Energy industry reported that their companies either have policies in place or were developing a strategy to reduce reliance on fossil fuels. As well, sixty percent of respondents answered ‘positive’ when asked whether they thought the low-carbon future will have a positive, neutral, or negative impact in their organization.
Some months ago, we talked about the Six Channels Pushing the Energy Transition, and it looks like 2023 will still see the Energy Transition as a very important part for society and energy companies. A trend we can’t ignore or miss, and proven to be our future.
At WTS Energy, we consider the Energy Transition to be the one of the biggest assets we can take as a company. With continuous efforts in adapting it in our core operations, we strive to guide Energy companies through the Energy Transition by providing the best talent and project management.
Don’t hesitate to contact us.
