Energy industry leaders say the energy transition is accelerating faster than ever, with 2022 set to be a strong year for industry growth, according to DNV.
In a new global report DNV analysed the views of more than a thousand senior energy professionals from across power, renewables, and oil and gas who “believe the huge commercial opportunities presented by the transition outweigh the risks to their businesses”.
The report, titled The Power of Optimism: Managing scale and complexity as the energy transition accelerates, details how energy leaders are finding most 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, stated DNV.
Confidence is lower in oil and gas, though DNV also noted the sector has bounced back from a crash in confidence going into 2021.
Skills shortages are the greatest barrier to growth for the energy industry, followed by a lack of policy support, the report also found.
Renewables players say permitting and licensing issues are 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.
Ditlev Engel (pictured), CEO of energy systems at DNV, said: “The world is not on track to meet the targets of the Paris Agreement.
“We can and must do much more to transition faster to a deeply decarbonised energy system.
“We see complexities in timing the transition, and in matching the scaling down of fossil fuels with the scaling up of clean energy – in terms of raw total energy, but also in its affordability and reliability. The solution is to scale up clean energy much, much faster.”
Expectations are on the rise for large, capital-intensive projects to be approved in the year ahead, while almost half of the industry expects their organisation to increase capital expenditure.
Green hydrogen is the specific technology that the greatest number of energy companies are targeting for increased investment in 2022, followed by solar PV, floating offshore wind, and carbon capture and storage (CCS).
Engel added: “New partnerships are forming as the energy industry develops new value chains in areas such as hydrogen, CCS, and energy storage.”
He said innovation and digitalisation are playing central roles as the industry looks to “scale technologies and manage the growing complexity in the energy system – from the decentralisation of energy generation and storage, to the variability of renewables, to the diversity of inputs integrated with gas and electricity networks, transport, and industrial processes”.