Three scenarios for our energy future: Statoil
Rapid change and recent developments in the energy landscape have introduced uncertainty. In its latest Energy Perspectives, Statoil shares 3 scenarios for our future...
The energy landscape is undergoing rapid change. While the global economy is projected to pick up pace in 2017, growth will be uneven. This, along with a sustained decline in upstream investments and changing demand patterns, brings uncertainty even as short-term supply adjustments bolster energy prices.
Growth in the LNG sector is enabling a more globally integrated gas market, although concerns over supply and demand balances linger. The adoption of renewable and grid storage technologies continues to gain momentum as technology improves, prompting reviews in power markets and grid investments. However, geopolitical developments and possible shifts towards inward-looking policies could dilute international climate change efforts to build a sustainable energy future.
Developments thus far this year indicate that a long term sustainable energy future is by no means a given, said Eirik Wærness, senior strategist and chief economist at Statoil. Possible future outcomes for global energy demand and fuel mix therefore vary significantly, depending on many interacting and very uncertain factors.
Statoil’s latest Energy Perspectives therefore presents three different scenarios of the energy future based on different assumptions about regional and global economic growth, technological developments, market behaviour, conflict levels and implications, and energy and climate policies.
“Reform” follows current macroeconomic and energy market trends and from the Nationally Determined Contributions (NDCs) in the Paris agreement, with a gradually less prevalent role for market-correcting policies as market-based solutions drive and deliver energy efficient and low-carbon technologies.
“Renewal” projects a technically possible, but very challenging pathway to energy-related CO2 emissions consistent with the 2° target for global warming. It includes rapid and coordinated policy changes, accelerated energy efficiency improvements, and large changes in the global energy mix driven by revolutionary development in electricity generation and parts of the transport sector.
“Rivalry” takes into account mounting uncertainty in conventional politics and policy making, populism, protectionism and geopolitical conflict, and where focus on security of supply and other priorities overshadow global climate targets.
By: Statoil