Nature and Biodiversity

The trilemma facing the energy industry and how it's dealing with it 

The energy industry is under pressure in the midst of its green transition

The energy industry is under pressure in the midst of its green transition Image: Photo by Abby Anaday on Unsplash

Ditlev Engel
Energy Systems CEO, DNV
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Nature and Biodiversity?
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Climate and Nature

This article is part of: Centre for Energy and Materials

Listen to the article

  • The energy industry is facing three challenges: the war in Ukraine has put energy security in the spotlight; coal output is rising; and, energy prices have increased.
  • This global survey of the energy industry highlights the impact of this trilemma and how the industry is dealing with it.
  • Investment in clean energy continues, however.

The energy industry is facing a trilemma. Russia’s invasion of Ukraine has exposed the energy industry and the world to the fragility of energy security. Coal plants are being fired up and renewables projects are coming under pressure. And, energy consumers are being pressed on the cost of energy. This trilemma is also in transition. In a complex and difficult year for the energy industry, we see the trilemma leading to competing priorities. But, in a decarbonised energy system, energy sustainability, affordability and security all pull in the same direction and the public and private sectors can resolve this threefold problem with a new approach to scaling and implementation.

DNV has just conducted its thirteenth global survey of more than 1,300 senior energy professionals, plus in-depth interviews with industry leaders from across power, renewables, oil and gas and energy-consuming industries. This research explores the confidence, sentiment and priorities for the energy industry across the world in the year ahead. It includes participation across the value chain, from oil and gas producers and renewables generators to the power sector and end users.

Key energy industry findings for 2023

In a complex and difficult year for the energy industry, the trilemma is leading to competing priorities.
In a complex and difficult year for the energy industry, the trilemma is leading to competing priorities. Image: DNV Energy Industry Insights 2023

In a complex and difficult year for the energy industry, the trilemma is leading to competing priorities. Few in the industry believe the transition will deliver secure, clean and affordable energy in the next decade to all parts of the energy system in their operating countries. Perhaps the most concerning finding of this research is that only 39% feel optimistic about reaching their organization’s decarbonisation targets, with as much as 29% feeling pessimistic about this goal.

Discover

What's the World Economic Forum doing about the transition to clean energy?

Markets are striving to keep up with the transition

Top growth barriers for the energy industry.
Top growth barriers for the energy industry. Image: DNV Energy Industry Insights 2023

The energy transition has accelerated through the COVID-19 pandemic and the energy crisis. This has left markets striving to keep up, across transmission and distribution systems, supply chains, permitting and licensing, financing, infrastructure and the workforce. Barriers could slow the pace of the energy transition in the year ahead, but momentum is building to break these barriers as societies increasingly feel the effects of climate and energy crises and as bottlenecks become more acute in holding back progress.

Optimism remains strong across the energy industry, but only the oil and gas sector shows improved sentiment.

Optimism remains strong across the energy industry, but only the oil and gas sector shows improved sentiment.
Optimism remains strong across the energy industry, but only the oil and gas sector shows improved sentiment. Image: DNV Energy Industry Insights 2023

Peak profits (perhaps) for oil and gas

The oil and gas industry has increased expectations for oil and gas investment in the year ahead, as a record year refines what acceptable profits look like for the sector. Oil and gas companies are slowing their shift into areas outside of core hydrocarbon businesses and holding back their focus on decarbonisation compared to 2022.

Have you read?

Renewables swept forward by decarbonisation

The renewables sector is expanding at speed, despite the challenges of power grid capacity, energy price volatility, inflation, supply chain failures, regulatory red tape and delays in supporting infrastructure projects.

Power industry under pressure

There has been a sharp drop in the proportion of electrical power respondents optimistic about industry growth for the year ahead. Half now say they are more focussed on short-term than long-term strategies, up from 34% a year ago.

The energy industry has strong expectations to increase investment in clean energy sources, carriers and enablers, however. Half of the energy professionals involved in the research expect their organizations to invest in low-carbon hydrogen/ammonia (52%) in the year ahead. There are similar proportions when it comes to wind (49%) and solar (46%). Over a third (37%) expect their organizations to increase investment in carbon capture and storage (CCS), while 57% say CCS will scale up rapidly in the next five years.

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

What is sustainable cooling and how can it help tackle the climate crisis?

Johnny Wood and Madeleine North

October 3, 2024

About us

Engage with us

  • Sign in
  • Partner with us
  • Become a member
  • Sign up for our press releases
  • Subscribe to our newsletters
  • Contact us

Quick links

Language editions

Privacy Policy & Terms of Service

Sitemap

© 2024 World Economic Forum