There is an energy transition underway, with renewable energy sources revolutionizing the way the world uses energy. This revolution is similar to how unconventional resources revolutionized the oil and gas industry. Innovation combined with a “can-do” attitude has transformed the business models for renewable and fossil fuel-based energy companies.
Depending on how you look at it, this energy transition has moved swiftly or in a more leisurely fashion. It was just a century or so ago that the burning of animal manure for heat was an accepted practice around the world. For all of the swiftness that our technological innovations move with, water buffalo dung still gets the job done today in parts of rural India, Pakistan and elsewhere. It took decades for King Coal to lose its throne of energy supremacy to the princes known as Oil and Natural Gas.
That rivalry plays out today, with natural gas making great gains in edging out coal as the preferred feedstock for power plants. But for every king there is a young upstart itching to upend the pecking order. Clamoring for fuel equality in the Game of Energy are the houses of Wind, Solar, Geothermal and Hydro. Each is making significant strides in its own unique way, and the day will come eventually when the House of Carbon will “bend the knee” to renewables.
As to when that will happen is the question of the day. DNV GL forecasts that by 2050 the primary energy supply will be “split roughly equally between fossil and renewable sources,” according to CEO Remi Ericksen in the company’s recently released Energy Transition Outlook.
As a provider of risk management, assurance and technical advisory services to customers in more than 100 countries, DNV GL devotes about 70% of its business to energy. The Outlook drew on the company’s experience in both fossil and renewable energy industries and its network of experts to produce a forecast that presents a central case rather than multiple possible scenarios.
“Advances in energy storage and renewables will create a highly competitive clean-tech coupling that will drive energy costs downward while accelerating energy efficiency,” he said. “And that will produce a very different world in short order—one where energy decouples from carbon and where the world’s energy use decreases while the global economy and population continue to grow.”
For now, remember that the electric-powered car scooting around town on solar-charged batteries did—at some point in that battery’s life—receive its go-go juice from a fossil fueled power plant. The Game of Energy truly is perpetually in motion.
Jennifer Presley’s As I See It column originally appeared in the October 2017 issue of E&P.
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