Energy Megatrends

UTP MBA - Energy Value Chain

5 September 2020
Speaker profile
Why are we here today?

Lecture

Conversation
3 things to be covered …
1. Megatrends impacting the energy sector

2. Energy transition

3. Energy talent outlook

Megatrends impacting the energy sector …
What are megatrends?
“Global megatrends are macroeconomic and geostrategic forces that are shaping
our world, and our collective futures in profound ways.

The implications of these forces are broad and varied, and they will present us
with both tremendous opportunities to seize—as well as extremely dangerous
risks to mitigate.” -- PwC
Megatrends across many perspectives
Megatrends across many perspectives
Megatrends across many perspectives
Megatrends across many perspectives
Megatrends across many perspectives
Climate change and resource scarcity
An expanding population and the rising demand for food, energy and
materials continue to strain the finite resources of the planet.

The need for solutions that improve energy efficiency, lower food waste and
provide alternatives to scarce resources has never been greater.

Underlying these trends is the persistent increase in global emissions which has
led to intensifying debates around climate change and how we can resolve it.
Planet Earth is in the hot seat …
● In 2018, global emissions continued their march higher growing 1.7% yoy.

● In turn, the US National Climate Assessment report noted that sea levels are
now rising twice as fast as 25 years ago

● Insurance company Swiss Re estimated recently that natural catastrophes

and extreme weather events caused $146bn in damages in 2018.
As climate change continues, natural disasters and abnormal weather
patterns will increasingly have effects on our socioeconomics landscape in
unprecedented ways.
The need for nutrition rises with per capita GDP in large emerging markets
The influence of social activism has continued to rise as consumers have become more
empowered, demanding environmentally sustainable products, increased corporate
social responsibility efforts, and other commitments to society.
Energy transition …
What is energy transition?
● Energy transition is a pathway toward transformation of the global energy
sector from fossil-based to zero-carbon by the second half of this century.
At its heart is the need to reduce energy-related CO2 emissions to limit
climate change.
● Decarbonisation of the energy sector requires urgent action on a global
scale, and while a global energy transition is underway, further action is
needed to reduce carbon emissions and mitigate the effects of climate
change.
● Renewable energy and energy efficiency measures can potentially achieve
90% of the required carbon reductions.
Clean energy today is cheaper than it has ever been
Carbon emissions trading …

https://www.youtube.com/watch?v=fJrFSLfaeeE
Carbon neutrality, or having
a net zero carbon footprint,
refers to achieving net zero
carbon dioxide emissions by
balancing carbon emissions
with carbon removal (often
through carbon offsetting) or
simply eliminating carbon
emissions altogether (the
transition to the "post-carbon
economy").

EU Parliament
Trendings to look out for …
● Innovators who provide solutions to climate change including producers of solar panels, wind
turbines and electric vehicle technologies.
● Substitutes to scarce materials, especially those used in new, essential technologies such as
batteries and smartphones.
● Better recycling practices are part of the solution and can also reduce material pollution. This is an
increasingly important theme as consumers and regulators turn their attention towards singleuse
plastic and sustainable packaging.
● The need for increased productivity in food production present opportunities to chemicals and
fertilizer companies, to machinery producers who reduce the need for human labour, as well as new
technologies such as drones, predictive weather analytics and precision agriculture that are
necessary to increase yield across the world.

Source: Blackrock
Energy talent outlook
Trend 1: Resource abundance and the need to be prepared for a sustained period of lower oil prices and
a focus on cost, efficiency, and speed

● Traditional talent is no longer scarce, exploration capability is less of a differentiator, megaprojects

are not the only way to grow, and market opportunities may only be economical for the earliest
movers in a basin.

● Meanwhile, conventional, deepwater, unconventional, and renewable assets each require a distinct
operating model that cannot be delivered optimally from a single corporate center.

McKinsey
Trend 2: Profound technological advances are disrupting the old ways of working and enabling step
changes in productivity

● Automation is replacing workers (including knowledge workers) on a large scale, and the jobs that
remain require increased human-machine interaction.

● As more devices connect to the cloud, data generation continues to grow exponentially.

● This explosion of data—combined with advanced analytics and machine-learning tools—lets

companies fundamentally reimagine how and where work gets done.

McKinsey
Trend 3: Demographic shifts mean that employees are demanding changes in the working environment
and expressing concerns about the role of oil and gas companies in society

● Millennials will soon constitute the majority of the workforce in developed markets, and have already
started their climb into management and executive roles.

● These digital natives bring their own expectations regarding technology, collaboration, pace, and
accountability.

● At the same time, a well-educated, globally competitive talent base has grown rapidly in emerging
markets.

McKinsey
Any
question?