The energy sector is navigating a tumultuous present while keeping a steadfast eye on a sustainable future, according to DNV’s latest annual survey. The report, now in its 15th year, captures the voices of over 1,100 senior energy professionals, painting a picture of short-term volatility tempered by long-term optimism.
Political risk has surged to the forefront as the primary barrier to growth, casting a shadow over the energy transition’s momentum. The survey reveals a significant drop in the percentage of professionals who believe the transition is accelerating, from 79% two years ago to a mere 55% today. This deceleration is not just a statistical blip but a stark indicator of the challenges ahead.
The energy transition, while necessary, is not without its casualties. Over half of the respondents acknowledge that some communities may bear the brunt of this shift, facing economic displacement, unequal benefits, and prohibitive costs. Traditional energy workers and poorer regions are particularly vulnerable, highlighting the need for inclusive policies that ensure a just transition.
In the immediate term, the industry is grappling with revenue and profit uncertainties, particularly in the renewables sector. Only half of the respondents expect to meet revenue targets, and a paltry 43% are optimistic about profits. This pessimism is a stark contrast to the figures from three years ago, underscoring the impact of geopolitical conflicts, economic concerns, and policy uncertainty.
Investment decisions are being deferred or scaled down, with only 39% of renewables professionals expecting increased investment in the coming year. This caution is a direct response to the current economic climate and the uncertainty it brings.
However, long-term confidence remains buoyed by powerful megatrends. Electrification, decarbonization urgency, and technological advancement are driving the industry forward. Ditlev Engel, chief executive of energy systems at DNV, emphasizes the need for immediate, coordinated efforts to maintain momentum. “A successful energy transition is not impossible,” he asserts, “but the urgency to accelerate action has never been greater.”
Digitalization is emerging as a critical enabler of the energy transition. A majority of respondents believe a whole systems approach is unfeasible without a fully digitalized infrastructure. Encouragingly, 59% of respondents plan to increase spending on digitalization, a trend that has remained consistent over the past four years. This investment includes technologies like artificial intelligence, which can optimize energy systems and enhance efficiency.
Yet, aging power grids are proving to be a significant bottleneck. Over three-quarters of power sector professionals cite outdated infrastructure as a barrier to renewables adoption, with 96% calling for urgent investment to modernize the grid. This infrastructure overhaul is not just about accommodating renewables but also about ensuring a resilient, low-carbon energy system that meets growing demand.
The survey’s findings underscore the need for strategic navigation in these uncertain times. The industry’s commitment to a sustainable future is unwavering, but the path is fraught with challenges. Immediate, coordinated efforts are essential to ensure that the energy transition is not just technologically feasible but also socially just and economically viable. The industry is at a crossroads, and the choices made today will shape the energy landscape of tomorrow.
