The industry faces major challenges in coming years. There follows an analysis of these challenges and how they may be overcome together.
Intelligent energy networks are at the epicentre of many changes under way in the energy industry (replacement of the most obsolete infrastructure, introduction of clean energies, electric vehicles and many other industry challenges). They all have the potential to significantly reduce energy network inefficiency, allowing a more interactive demand management, enhancing the integration of the energy sources distributed using the network, changing the customer’s experience and facilitating new uses of energy.
The cleanest energies and concerns associated with the regulation of emissions and energy efficiency are still among the main priorities of many industry companies worldwide. Companies are bringing major changes into the fuel mix, investing in and deploying renewable and cleaner energy sources, including nuclear energy.
Corporate operations are doubtless a major growth driver for energy industry companies and a way of acquiring new capacity, technology and skills necessary to tackle issues such as supply security and the generation of cleaner energy sources. Corporate operations are critical for companies seeking to increase their international presence and achieve an adequate balance in their portfolios. External investors remain keenly interested in the industry. The influence of Chinese international investors is also relevant and will grow in the future.
In the energy industry, the demands of capital projects are huge. The International Energy Agency estimates that, in the energy industry alone, worldwide cumulative investment requirements for the period 2010-2035 will amount to 16.6 billion dollars (based on the dollar’s value in 2009). Investment in infrastructures for optimised, in more intelligent networks, in new transmission networks to integrate renewable energy sources, in improved interconnectors and in replacing the most obsolete infrastructures are all pressing concerns which, however, bear little relation to investments in new generation capacity for fossil fuels, renewable energies or nuclear energy.
In the current environment marked by higher energy prices, stakeholder pressure on energy industry companies to provide operational efficiency and effectiveness is more intense than ever. The increase in production costs, pressure on supply lines and the need to invest in a growing and more diversified infrastructure entail significant additional costs in the value chain. Companies must foresee that it will continue to be difficult to pass on costs to final users and therefore internal efficiency and performance will be even more vital. Moreover, intelligent asset management is increasingly significant, particularly in the context of capital investment programmes at a time when a large volume of infrastructures are required.
The activities of energy companies are affected by a broad range of regulatory requirements. Besides financial reporting requirements, companies must respond to objectives in the fields of energy policy, emissions and climate change, price and tariff requirements, and a broad range of minimum service obligations. Issues such as data regulation and security are also increasing relevant.
The energy industry is a mature sector that continues to evolve and to undergo major changes in market dynamics. Characterised by prolonged project execution periods and major business cycle swings, success in this activity requires careful strategic planning and a solid long-term approach.
Governments and consumers the world over demand more security in energy supplies. In developing economies, energy is synonymous with economic growth. In developed economies, energy companies are encouraged to supply clean, easily accessible and reasonably-priced fuels.
Scarce qualified labour is still a genuine challenge for energy industry companies worldwide. In some countries, such as the United States, the average age of employees is close to 50 and nearly half of industry professionals will reach retirement age in the next decade. Recruitment strategies and the capacity to retain employees in the industry are increasingly significant.