May 2020

As part of the Women's Energy Council Celebrating Equal initiative we asked the members of our Global Female Influencer 275 list to answer the question – 2030: How is the energy industry different from 2020?

Below are the thoughts of Amy Bowe, Head of Carbon Research for Wood Mackenzie

The energy industry of 2030 will look significantly different to 2020 in terms of demand patterns, supply mix and corporate landscape.  These changes will be spurred by personal security concerns, growing environmental awareness and localisation, and enabled by technological advance and government financial support.

First, unprecedented shifts in consumer behaviour, accelerated by the coronavirus pandemic of 2020-2021, will lead to significant changes in energy demand by 2030.   Transport demand will see the most significant changes.  Commuting and business travel patterns will never return to pre-coronavirus levels following a prolonged period of enforced social distancing and isolation, as businesses in the service and information industries realise that they can operate efficiently via remote working and web conferencing.  Equally, online commerce will continue to displace demand for personal mobility linked to shopping.  Changes in supply chains to favour local and domestic suppliers for both security and real-time delivery benefits will mean goods need to travel shorter distances, and drones will increasingly account for a greater percentage of last mile logistics.  Though mobility will rebound to a degree following the pandemic, concern over contagion on public transport will spur increased demand for personal automobiles in urban areas.  This demand will initially be met with traditional ICEs or EVs; however, environmental concerns, aided by significant public spending programmes to reboot economies, will accelerate the transition towards connected autonomous EVs.  Apart from decreased business and freight traffic, the airline industry will also see reduced demand for leisure travel due to a slow economic recovery, lingering fear over travel-linked contagion and increased focus on the environmental impact of tourism.  As virtual reality and drone technology continue to improve, coinciding with the economic recovery, virtual reality tourism will cannibalise demand for physical travel. 

These dramatic shifts in demand will accelerate the transition to a low-carbon economy.  A portion of coronavirus-related oil demand destruction will become permanent, both due to reduced demand for all types of travel and the increasing electrification of the vehicle fleet.  Electricity will see huge surges in demand, as the pace of digitalisation and electrification accelerates.  Investment to meet this growth in demand goes primarily into renewables (including green hydrogen), storage, smart grids and other supporting infrastructure, again aided by post-coronavirus economic stimulus packages that prioritise clean energy solutions. The decade will also see the emergence of a CCUS industry and growth in natural sinks to offset emissions associated with residual hydrocarbon use.

The shifts in demand and energy mix will be reflected in the corporate landscape, as well.  The dramatic drop in oil price due to coronavirus-related economic disruptions will precipitate a period of contraction and consolidation in the oil and gas industry, as less diverse, financially resilient companies collapse.  Some of these may be acquired, while others will simply be liquidated.  Those who remain will seek to further diversify their portfolios, spurring consolidation within the renewable energy and retail sectors, as well.  At the same time, the accelerated pace of the energy transition and related growth in new technologies will lead to a proliferation of new players, such that the corporate landscape across all energy sectors will look significantly different from the 2020 landscape.