What is a global energy transition?
An energy transition disrupts the status quo. A new energy source emerges, leading to a structural and permanent change in supply, demand, energy mix and prices.

At stake are the fortunes of energy and infrastructure companies, end-use customers, financial and service companies, supply chain participants and technology providers.

All will face both threats and opportunities.

“Accelerated technological advancements have created a bridge between futuristic goals of smart connected cities with autonomous systems and a large-scale commodity switch. The result is that the energy transition seems less the plot of a sci-fi movie and more of a feasible, albeit ambitious, plan.”
Prajit Ghosh, global head of power & renewables strategy

What’s the timeframe for transitioning to an age of power and renewables?
With the current global energy transition well under way, two primary technology drivers have emerged: renewables and the use of electric-based technologies in transportation. In this recent report, we outline how those two drivers will lead to sustainable technologies — such as autonomous driving and the wider application of advanced grid-edge and machine learning applications — effectively becoming the norm by 2035, less than 20 years away.

By 2035, close to 20% of global power needs will be met by solar or wind. Similarly, upwards of 20% of all miles travelled globally by cars, trucks, buses and bikes will use electric motors rather than gasoline or diesel.

Accelerated technological advancements have created a bridge to futuristic goals of smart connected cities with autonomous systems and a large-scale commodity switch. The result is that the energy transition seems less the plot of a sci-fi movie and more of a feasible, albeit ambitious, plan.

After 2035, we expect to see adoption rates for renewable generation and electrified transport increase rapidly as they become the default choice across many energy systems around the world. So much so that half of all new power plants constructed globally are either solar or wind, or a hybrid combination with storage. Plus, half of all additional miles travelled by road will use an electric vehicle.

What’s next for companies and investors?
The next 15 years of the transition will be critical to study, prepare and plan. Companies and investors will need to understand the future opportunities across the rapidly changing energy landscape, while remaining in touch with the evolving oil, power and metals markets.

Source: WoodMackenzie