What happened in 2022 has challenged our assumptions about the energy transition. Energy markets changed dramatically when the geopolitical crisis with Russia placed energy security front and center. As natural gas jumped to record prices, many gas-dependent companies and governments were forced to revisit their energy strategies.
In Q3 and Q4 2022 we surveyed 555 senior executives in 21 countries who are active in energy and broader industry to find out what this means for the energy transition.
Can they balance energy security, sustainability and affordability to solve the energy trilemma?
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What happened in 2022 has challenged our assumptions about the energy transition. Energy markets changed dramatically when the geopolitical crisis with Russia placed energy security front and center. As natural gas jumped to record prices, many gas-dependent companies and governments were forced to revisit their energy strategies.
In Q3 and Q4 2022 we surveyed 555 senior executives in 21 countries who are active in energy and broader industry to find out what this means for the energy transition.
Can they balance energy security, sustainability and affordability to solve the energy trilemma?
Share
Report summary
This energy trilemma – the balance of energy security, sustainability and affordability, is a new challenge, but the senior executives in the research still feel like they are on course for net zero.
This energy trilemma – the balance of energy security, sustainability and affordability, is a new challenge, but the senior executives in the research still feel like they are on course for net zero.
This energy trilemma – the balance of energy security, sustainability and affordability, is a new challenge, but the senior executives in the research still feel like they are on course for net zero.
This energy trilemma – the balance of energy security, sustainability and affordability, is a new challenge, but the senior executives in the research still feel like they are on course for net zero.
How prepared do you think your organization is to transition toward having net-zero greenhouse gas emissions by 2050?
In 2022, more organizations say they are prepared to transition to net zero by 2050 than they did in 2021
Hover over the visualization to compare with 2021 data
How prepared do you think your organization is to transition toward having net-zero greenhouse gas emissions by 2050?
In 2022, more organizations say they are prepared to transition to net zero by 2050 than they did in 2021
Tap on the visualization to compare with 2021 data
Businesses are not just confident about their preparedness – many are also positive about whether the energy transition is a business priority.
More than a third, however, are concerned that it is slipping down the agenda.
say they are not worried that their companies are deprioritizing the energy transition because of the energy crisis
say they are worried about this
Coal is back – for now
Demand for coal is rebounding to levels last seen in 2013 as the tight gas supply causes a shift back to burning coal for power generation, which is cheaper but more emissions intensive. In Asia-Pacific, coal still accounts for most of the power generation. Companies there are losing confidence in their energy transition.
Businesses are not just confident about their preparedness – many are also positive about whether the energy transition is a business priority.
More than a third, however, are concerned that it is slipping down the agenda.
say they are not worried that their companies are deprioritizing the energy transition because of the energy crisis
say they are worried about this
Coal is back – for now
Demand for coal is rebounding to levels last seen in 2013 as the tight gas supply causes a shift back to burning coal for power generation, which is cheaper but more emissions intensive. In Asia-Pacific, coal still accounts for most of the power generation. Companies there are losing confidence in their energy transition.
Businesses are not just confident about their preparedness – many are also positive about whether the energy transition is a business priority.
More than a third, however, are concerned that it is slipping down the agenda.
say they are not worried that their companies are deprioritizing the energy transition because of the energy crisis
say they are worried about this
Coal is back – for now
Demand for coal is rebounding to levels last seen in 2013 as the tight gas supply causes a shift back to burning coal for power generation, which is cheaper but more emissions intensive. In Asia-Pacific, coal still accounts for most of the power generation. Companies there are losing confidence in their energy transition.
What will it take to balance energy security with access to sustainable and affordable energy? For the survey respondents, three activities are most important:
— 01
Investing in lower-carbon sources of energy, such as natural gas, renewables and nuclear
— 02
Planning and preparing for operational disruptions from extreme weather
— 03
Reskilling and hiring to create an energy transition-ready workforce
What will it take to balance energy security with access to sustainable and affordable energy? For the survey respondents, three activities are most important:
— 01
Investing in lower-carbon sources of energy, such as natural gas, renewables and nuclear
— 02
Planning and preparing for operational disruptions from extreme weather
— 03
Reskilling and hiring to create an energy transition-ready workforce
Companies are going for natural gas
In response to Europe’s energy crisis, companies are making or planning to make new investments in natural gas/liquefied natural gas (LNG).
of respondents are investing or planning to invest in natural gas/LNG because of the energy security crisis
On the US Gulf Coast, for instance, 2022 has seen Cheniere’s final investment decision to expand liquefaction capacity in Corpus Christi and Venture Global’s LNG Terminal in Plaquemines Parish, Louisiana. Another example is Woodside Energy’s construction of a second LNG train, Pluto Train 2, to service the Scarborough gas field in Western Australia.
Use of and investment in natural gas, solar and biomass/waste-to-energy is expected to continue to be a priority in the future
Companies are going for natural gas
In response to Europe’s energy crisis, companies are making or planning to make new investments in natural gas/liquefied natural gas (LNG).
of respondents are investing or planning to invest in natural gas/LNG because of the energy security crisis
On the US Gulf Coast, for instance, 2022 has seen Cheniere’s final investment decision to expand liquefaction capacity in Corpus Christi and Venture Global’s LNG Terminal in Plaquemines Parish, Louisiana. Another example is Woodside Energy’s construction of a second LNG train, Pluto Train 2, to service the Scarborough gas field in Western Australia.
Use of and investment in natural gas, solar and biomass/waste-to-energy is expected to continue to be a priority in the future
Companies are going for natural gas
In response to Europe’s energy crisis, companies are making or planning to make new investments in natural gas/liquefied natural gas (LNG).
of respondents are investing or planning to invest in natural gas/LNG because of the energy security crisis
On the US Gulf Coast, for instance, 2022 has seen Cheniere’s final investment decision to expand liquefaction capacity in Corpus Christi and Venture Global’s LNG Terminal in Plaquemines Parish, Louisiana. Another example is Woodside Energy’s construction of a second LNG train, Pluto Train 2, to service the Scarborough gas field in Western Australia.
Use of and investment in natural gas, solar and biomass/waste-to-energy is expected to continue to be a priority in the future
— 03
The pace of the energy transition will be determined by technology and culture change
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— 03
The pace of the energy transition will be determined by technology and culture change
BACK TO TOP >
Businesses need to invest in diversifying the energy mix and make plans for scaling up lower-carbon fuels. To do this at pace, they need technology and the right culture.
Technology has become the most important way to accelerate the energy transition, and culture is growing in value
Culture can transform
For new technologies and energy systems to develop, companies need to be able to encourage innovation and collaborative thinking. Recent research by PwC shows that some 75% of oil and gas executives believe a reasonably high tolerance of failure and risk and hands-on involvement by senior management in innovation projects are the most important ways to build a solid innovation culture.
“It is critical that organizations take the time and resources to align all their employees to a culture around sustainability,” says Lorenzo Simonelli, Chairman and CEO, Baker Hughes. “A company’s mission and purpose must also reflect this changing dynamic – to drive a sustainable future, helping to connect employees, customers and partners.”
But a culture change must also take place in wider society. New energy technology and innovation are important, but there is a lot that both companies and consumers can do with existing technology to reduce their emissions and manage costs.
The energy trilemma requires a foundation of new energy partnerships
The success of solving the trilemma will depend to a large degree on addressing three hard truths:
— 01
Making technology available: new and mature technologies need to be de-risked and scaled up to abate greenhouse gas emissions at scale.
— 02
Hydrocarbons: hydrocarbons use is here to stay the next few decades to balance the immediate need for energy. But energy must be managed with efficiency and emissions must be captured to ensure climate change mitigation.
— 03
Partnerships: the public and private sectors have to work together to accelerate and commercialize new clean energy value chains and systems.
Partnerships and collaboration can unlock the energy systems of the future, as we work together to solve the energy trilemma.
Businesses need to invest in diversifying the energy mix and make plans for scaling up lower-carbon fuels. To do this at pace, they need technology and the right culture.
Technology has become the most important way to accelerate the energy transition, and culture is growing in value
Culture can transform
For new technologies and energy systems to develop, companies need to be able to encourage innovation and collaborative thinking. Recent research by PwC shows that some 75% of oil and gas executives believe a reasonably high tolerance of failure and risk and hands-on involvement by senior management in innovation projects are the most important ways to build a solid innovation culture.
“It is critical that organizations take the time and resources to align all their employees to a culture around sustainability,” says Lorenzo Simonelli, Chairman and CEO, Baker Hughes. “A company’s mission and purpose must also reflect this changing dynamic – to drive a sustainable future, helping to connect employees, customers and partners.”
But a culture change must also take place in wider society. New energy technology and innovation are important, but there is a lot that both companies and consumers can do with existing technology to reduce their emissions and manage costs.
The energy trilemma requires a foundation of new energy partnerships
The success of solving the trilemma will depend to a large degree on addressing three hard truths:
— 01
Making technology available: new and mature technologies need to be de-risked and scaled up to abate greenhouse gas emissions at scale.
— 02
Hydrocarbons: hydrocarbons use is here to stay the next few decades to balance the immediate need for energy. But energy must be managed with efficiency and emissions must be captured to ensure climate change mitigation.
— 03
Partnerships: the public and private sectors have to work together to accelerate and commercialize new clean energy value chains and systems.
Partnerships and collaboration can unlock the energy systems of the future, as we work together to solve the energy trilemma.
Businesses need to invest in diversifying the energy mix and make plans for scaling up lower-carbon fuels. To do this at pace, they need technology and the right culture.
Technology has become the most important way to accelerate the energy transition, and culture is growing in value
Culture can transform
For new technologies and energy systems to develop, companies need to be able to encourage innovation and collaborative thinking. Recent research by PwC shows that some 75% of oil and gas executives believe a reasonably high tolerance of failure and risk and hands-on involvement by senior management in innovation projects are the most important ways to build a solid innovation culture.
“It is critical that organizations take the time and resources to align all their employees to a culture around sustainability,” says Lorenzo Simonelli, Chairman and CEO, Baker Hughes. “A company’s mission and purpose must also reflect this changing dynamic – to drive a sustainable future, helping to connect employees, customers and partners.”
But a culture change must also take place in wider society. New energy technology and innovation are important, but there is a lot that both companies and consumers can do with existing technology to reduce their emissions and manage costs.
The energy trilemma requires a foundation of new energy partnerships
The success of solving the trilemma will depend to a large degree on addressing three hard truths:
— 01
Making technology available: new and mature technologies need to be de-risked and scaled up to abate greenhouse gas emissions at scale.
— 02
Hydrocarbons: hydrocarbons use is here to stay the next few decades to balance the immediate need for energy. But energy must be managed with efficiency and emissions must be captured to ensure climate change mitigation.
— 03
Partnerships: the public and private sectors have to work together to accelerate and commercialize new clean energy value chains and systems.
Partnerships and collaboration can unlock the energy systems of the future, as we work together to solve the energy trilemma.
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© 2023 Baker Hughes Company