Global energy industry powers ahead on transition, finds DNV research

The energy transition is accelerating faster than ever, with 2022 set to be a strong catalyst for industry growth amid an optimistic outlook from global executives, according to a report from DNV analysing the views of more than 1,000 senior energy professionals.

Expectations are on the rise for large, capital-intensive projects to be approved in the year ahead, while almost half of the energy industry expecting their organisation to increase capital expenditure, said the report, titled The Power of Optimism: Managing scale and complexity as the energy transition accelerates.

Senior industry players from across power, renewables, and oil and gas believe the huge commercial opportunities presented by the transition outweigh the risks to their businesses. According to DNV, most such energy leaders were finding confidence from their own company’s strategies within renewables and low-carbon gas, followed by expectations for supportive policy changes and reforms.

Confidence for growth is highest among power and renewables companies, and while it is lower in oil and gas, the sector has bounced back from a crash in confidence going into 2021, the report said.

“We see an optimistic energy industry: confident about growth, boosting investment, and making critical strategic decisions in the energy transition. But we also see significant concerns about barriers to progress – from a skills shortage, to policies, financing, supply chains, and permitting – as the enormous task of transforming the energy system gathers pace,” Ditlev Engel, CEO, Energy Systems at DNV, said in a statement.

Skills shortages were found to be the greatest barrier to growth for the energy industry, followed by a lack of policy support. Renewables players quoted in the report said permitting and licensing issues were the greatest barrier to growth, and the power and renewables sectors both point to supply chain pressures as a significant barrier.

Almost two thirds of the energy industry believes that supply chain issues are slowing down the energy transition.

Maintaining reliable energy supply is also a concern, with many in the oil and gas industry convinced that not enough is being invested in exploration and upstream expansion to meet future demand.

Nearly 38 percent of oil and gas industry respondents said that their organisation was finding it increasingly difficult to secure reasonably priced finance for projects.

Overall, the industry remained resilient and resurgent, the report concluded. “Optimism is a much-needed and powerful force in the energy industry today. The power of optimism is behind most of humanity’s greatest accomplishments, from medicines to moon-landings, and achieving an energy transition that limits global warming to 1.5°C certainly fits into that category,” Engel said.