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World energy scenarios 2016 the grand transition

IN COLLABORATION WITH THE WORLD ENERGY COUNCIL, ACCENTURE STRATEGY AND PAUL SCHERRER INSTITUTE

Overview

The next 40 years will be characterized by several important trends: a reduction in population and the global labor force; an every-expanding range of new technologies; a greater appreciation for the planet’s environmental boundaries; and a shift in economic and geopolitical power towards Asia. These trends will have far-reaching consequences for the energy industry and will require companies across the energy supply chain to fundamentally rethink their businesses. To help energy executives determine the direction their companies will take, we have developed three detailed scenarios that illustrate how the world in general, and the energy industry specifically, might unfold between now and 2060. By illustrating the challenges to and opportunities for energy companies, these scenarios provide an important framework that can help energy executives make critical strategic decisions today that will enable their companies to thrive in the coming decades.

DOWNLOAD WORLD ENERGY SCENARIOS | 2016: THE GRAND TRANSITION - SUMMARY REPORT [PDF]

DOWNLOAD WORLD ENERGY SCENARIOS | 2016: THE GRAND TRANSITION - FULL REPORT [PDF]

Key Findings

Several key global trends are converging that will make the world a dramatically different place in 2060. These trends are represented by three metaphorical scenarios (Modern Jazz, Unfinished Symphony, Hard Rock) to help illustrate the challenges energy companies may face:

  • Modern Jazz, characterized by a diverse set of resilient and lower-carbon energy systems, and a highly complex and competitive market landscape that drives efficiency, innovation, open access to information and rapid deployment of new technologies

  • Unfinished Symphony, in which the world has shifted to a resilient, integrated, global low-carbon energy system, where global unified action is taken on security, environmental and economic issues; and global institutional and national governments support enabling technologies

  • Hard Rock, a fractured world, with a diverse set of economic, energy and sustainability outcomes, where nationalist interests prevent countries from collaborating effectively on a global level, with limited attention to addressing climate change; and technologies that are mandated based on availability of local resources

Recommendations



These scenarios’ impact on energy are significant, requiring energy companies to make key strategic decisions about their business:

Modern Jazz

  • Lifestyles and economies demand more energy, but efficiency gains keep consumption growth moderate

  • Energy markets are liquid and distributed energy and LNG trade become more pervasive

  • Renewables, driven by consumers, and gas increase their share of the primary energy supply

Unfinished Symphony

  • Top-down mandates and greater efficiency dampen energy consumption

  • Energy markets are characterized by an integrated digital/physical infrastructure and zero-marginal cost utilities

  • Renewables, driven by policy, capture greater share of the primary energy supply, as does gas with CCS as a transition fuel

Hard Rock

  • Slower economic growth dampens energy demand, but limited efficiency gains keep consumption growth high

  • Market structures are fragmented across regions and business models emphasize local context

  • Renewables, driven by national security concerns, and coal account for the largest share of the primary energy supply

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