Energy Voice: Energy firms learning to cope with ‘certainty of uncertainty’, survey reveals

1st March 2021

Press & MediaEuropeGlobalMarket DesignCovid-19

Energy firms learning to cope with ‘certainty of uncertainty’, survey reveals

Written by: Hamish Penman

This article was originally published in Energy Voice on 1 March 2021. 

An Introductory Note from Dr Angela Wilkinson:

Its a busy month with IP Week, Africa Energy Indaba, and CERA Week, just to name a few. At every opportunity I continue to promote our action-orientated leadership agenda on humanising energy - engage more people in energy!

Energy matters in the COVID-19 pandemic era continue to be characterised by greater unevenness, increasing diversity and persistent uncertainty. Technology development is a given, but trust and cooperation cannot be taken for granted. Energy companies - large and small, state-owned and listed, integrated and ultra-local - are having to work harder to maintain their economic, social and environmental 'licences to operate'. I hope we can rethink the metrics for the 'S' in ESG reporting before COP-26 and overcome the trap of people vs. planet. 

We know that recovery from crisis will not be quick or easy and there is an opportunity to build forward together by involving people in energy. As we have for nearly 100 years, we engage with increasing diversity in energy - people, uses, technologies, pathways - as a source of inspiration, information and innovation. I believe in the power of 'we' and that the World Energy 'WE' community is unique and more relevant than ever. In an era of energy for people and planet, we are all hoping and trying to move faster, together! There is a very crowded and highly fragmented energy leadership landscape and a new trap of high-stakes advocacy - often single solution, single technology, single issue or single pathway. There is no one size fits all or silver bullet solution. Multiple pathways in multiple geographies are going to deliver more energy and climate neutrality - solutions for the 100% not 1-10% of humanity. We all need to start to think - clean, affordable, reliable and equitable energy - CARE-filled transition solutions. We can help identify the 'how to' by learning with and from different countries, companies, cities and communities, by involving different sectors and segments of society and by being open to learning and pragmatic in progress the art of the possible. 

We are working on accelerating the 'soft system' capabilities - we are striving to enable a step-change in energy literacy, diversity in skills, and energy futures shaping. Energy is more than carbon, technology and investment. It takes a whole energy community to build and transform the entire energy system. 

Energy firms learning to cope with ‘certainty of uncertainty’, survey reveals

The World Energy Council’s latest Covid-19 survey shows that less than a third of companies are currently experiencing significant disruption as a result of the pandemic. That’s a decrease of around half based on the figures recorded in April 2020.

The percentage of firms reporting a “slight impact” to their operations rose marginally, compared to last year.

Energy Voice has seen the preliminary results of the global forum’s survey, which includes responses from more than 230 companies across 6 regions and 57 countries. Dr Angela Wilkinson, Secretary General of the World Energy Council, said the study provides a “quick pulse” of current attitudes and trends currently felt in the industry. She added: “We’re seeing that people have learned to operate through this crisis – there’s a little bit more certainty about uncertainty.

“That’s a relief because before, everyone wanted to become certain as quickly as possible. Organisations are still being affected but it’s not creating as much panic because we’re learning to navigate through the indecision.

It’s still not clear what the outcome is going to be but we’re managing.”

A significant driver in firms’ improved outlook is the prospect of increased demand for energy as lockdowns begin to lift across the world. There have been tentative whispers of oil returning to the dizzying heights of $100 a barrel in the not too distant future, aided by OPEC+ production cuts and dwindling investment.

Dr Wilkinson said: “Significant disruption is less in the oil and gas sector because there’s a retightening in oil demand and upward pressure on prices. “Our survey shows people expect some permanent disruption but, globally, we expect there to be a return to demand growth in oil and gas, at least for the foreseeable future.”

Other key findings include the view from firms that “insufficient behavioural changes” are the biggest barrier to hitting the Paris Agreement. A lack of government incentives and poorly defined energy policy were second and third respectively.

The majority of respondents also indicated that a significant gap exists between the current role of consumers in energy systems and what is needed to successfully recover from Covid-19.

Dr Wilkinson said: “It sometimes seems that that the only way to think about energy demand is to project it forward, assuming behaviours don’t need to change, and then work out the economics. I don’t think that’s possible. The only way to do it is to activate the pull of society and for that we need customers that understand the choices they’re making, the costs they’re going to face and are going to be able to pay for them.

“The pace of transition isn’t determined by the accelerated rate of technological innovation but by the ability of people to change their behaviours. We live in a society where responsibilities are distributed across people, governments and businesses and, at the moment, that’s not being discussed with regards to the energy transition.”

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