Skip to main content

Energy trilemma and a shift towards sustainability

Hydrocarbon Engineering,


According to energy companies surveyed by PwC for its new global power and utilities survey, the potential for a robust global climate deal at the Paris Climate Summit in December of this year is driving an increased emphasis on renewables and clean technology over the next five years. Evaluating the classic energy trilemma between security, affordability and sustainability, survey respondents appeared to be anticipating a more robust climate deal than has been achieved before, with sustainability/cleaner energy moving up from 61% of their focus in the trilemma now to 81% in just five years.

The security of supply remains the main priority, with the shift in focus towards sustainability largely at the expense of affordability. This emphasis change is biggest in South America which has seen a move from 54 – 83% and smallest in Asia Pacific where the shift is from 55 – 65%. The report has also found that power utilities businesses around the world are reporting a difficult transition as energy transformation takes hold with increased concern about immediate risks to the power system as well as challenges adjusting to longer term changes.

Risks

To 2020, concerns about almost all of the major risks facing the power sector are rising. Alongside the leading risks of regulatory uncertainty and the difficulties of attracting investment, companies are moving to high alert on other key risks:

  • Sophisticated cyber attacks. 75% of respondents are concerned to 2020, up from 40%.
  • Fuel availability/supply risk. 77% of respondents see this as a moderate to very high concern in 2020.
  • Blackouts. 74% are concerned for them in 2020.
  • Emissions/air pollution. 75% are concerned for 2020 levels.

Sustainable strategies

The survey has reflected that the energy sector is mindful of the challenges facing it but is uncertain about how successfully they can be addressed. PwC has said that in the case of the key issues of technological change, for example, more survey participants say their company is struggling to respond effectively than are dealing with it successfully, 38% versus 25% in this instance with the remainder standing somewhere inbetween. The survey has found a missed outlook on how sustainable existing strategies will be:

  • 43% of those in North America and 35% in Europe say that current power sector company business models are already broken and the need for change is already urgent.
  • The urgency of business model change is perceived to be less everywhere.
  • 58% say they ere a medium to high probability that the sector will face a downward or even death spiral from disintermediation, technology disruption and customer behaviour.

Comments

Norbert Schwieters, Global Power and Utilities Leader said, “looking ahead, we think predictions of a death spiral for companies in the power and utilities sector are overdone. But, the dangers facing the sector are intensifying and companies will need to stay ahead of change. The challenge will be to make timely moves to gain the most of the market opportunity of old energy systems and business models while, at the same time, transitioning to the new business models required as energy transformation takes hold.

“Areas that are limited or only emerging importance to the sector at the moment, such as smart city, smart home and smart community infrastructure, local energy systems, electric vehicles and off grid solutions, will become increasingly important alongside an increased emphasis on capabilities such as product innovation, big data platforms, digitisation and online security.”


Edited from press release by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/the-environment/20052015/energy-trilemma-pwc/

You might also like

TotalEnergies and SINOPEC join forces to produce SAF

TotalEnergies and China Petroleum and Chemical Corp. (SINOPEC) have signed a Heads of Agreement (HoA) to jointly develop a sustainable aviation fuel (SAF) production unit at a SINOPEC's refinery in China.

 
 

Embed article link: (copy the HTML code below):