The first half of this decade has been a volatile one for our industry. We have gone from digging out of the great recession, to relatively heady days, to one of the worst downturns, if not the worst, the industry has seen. In tandem, several significant macro trends have continued to unfold across the globe: lower population and global labor force growth, a shift in economic and geopolitical power toward Asia, a range of disruptive new technologies, and greater appreciation for the planet’s environmental boundaries. Combined, these underlying drivers will reshape the economics of energy in the next half of the decade and beyond—an uncertain journey the World Energy Council (WEC) calls “The Grand Transition.”
Accenture Strategy has attempted to eliminate some of the uncertainty these trends and drivers are creating and add some clarity to what lies ahead as the Grand Transition gains momentum. We played an instrumental role in helping the WEC develop three scenarios that shed light on the new opportunities, as well as the challenges and risks, that energy companies could face in the next 40 years:
These three scenarios, developed through a series of interviews and workshops with industry leaders and experts around the world, present distinctly different yet plausible energy futures. A few key threads that emerged from the work are the following:
Energy executives can use these scenarios as valuable frameworks when making critical strategic decisions today to reshape their companies to thrive in the coming decades. Regardless of scenario, leading companies will be those that adapt quickly and think creatively about where they play and how they win. The former will require companies to consider rebalancing their energy portfolio; the latter, a forward-looking view of using business and digital technologies to transform how they deliver work and organize and manage performance. The fact is, the Grand Transition has already begun. Companies, and the broader set of industry stakeholders, can ill afford to be left lagging in adapting, innovating and transforming.
You can read more about these three scenarios for the Grand Transition, and what they might mean for the industry, in the executive summary, World Energy Scenarios 2016: The Grand Transition.