The Energy industry is facing a fast-paced transition. The decisions made today by top industry executives will determine the future of their company’s market positioning and their competitive advantage. To navigate the energy transition, executives need to understand technological enablers, such as digital technologies, circular economy, renewables, energy storage, and electrification technologies. Besides technology, energy leaders need to understand the driving forces behind economic, environmental, political, and social elements in the energy industry (i.e. economic growth, energy consumption, global warming, air pollution, regulatory interventions, changes to consumption patterns due to increased environmental consciousness, adoption of low-emission technologies).


One should also understand the macro trends and key drivers determining the future scenarios of energy. Key uncertainties are societal responses to climate change (closed regional economies or open global economy) and global energy transition dynamics (proactive or reactive). There are four plausible scenarios (closed-proactive; closed-reactive; open-proactive; open-reactive economies) against which companies need to test their strategies.

Decarbonization is expected to become a global imperative. Decarbonization in the Power and Utilities sector is expected to be driven by cost declines in wind and solar power and in energy storage technologies. In the Oil and Gas sector, decarbonization is mostly driven by customer and stakeholder pressure for carbon and methane emissions reductions during field operations. The trend of Oil and Gas companies investing in clean energy businesses is expected to continue. In industrial manufacturing a growing number of companies are setting targets for electrification of industrial processes, heating, and cooling, and even equipment and fleets.

Energy efficiency is another area in which substantial progress has already been made. Global energy demand is expected to continue to grow, but efficient lighting and appliances, energy management systems, and other new technologies mean energy demand growth will not likely match the pace of population and economic growth.

The emergence of new technologies, and in particular the declining costs of these technologies, has been a key element in the energy transition so far and will likely continue to be a critical element in determining the future of the energy sector. Key technologies that will shape the future of energy transition are: Digital technologies, Circular economy, Renewables, Carbon capture, utilization and storage, Energy storage, and Electrification technologies. Some of the fastest growing new companies today are the energy sector disruptors such as Bulb Energy and Octopus Energy that are attracting many new customers and getting the attention of the investors.

This energy transition brings complex challenges, but also presents a great opportunity for companies to commercialize new technologies, invest in new business models, and manage customer and stakeholder expectations.

Kruno Škrinjar