Trends that are changing the energy sector

 

Transition towards more renewable energy is creating opportunities and challenges for security of global energy infrastructure. Transition towards more renewable energy is creating opportunities and challenges for security of global energy infrastructure.

For the past four years, the World Economic Forum has benchmarked the energy systems of individual nations through its Energy Architecture Performance Index. This year’s benchmark of 126 countries focuses in particular on energy security and access to energy, areas which have undergone a great deal of change, thanks to the following three trends:

1. The transition towards more renewable energy and diversified supplies is creating opportunities and challenges for the security of the global energy infrastructure. As renewables are now part of the energy portfolio and are rapidly gaining market share, they bring along benefits such as energy mix diversification, with distributed generation growing at a fast pace worldwide and its installed capacity expected to more than double in the next decade.

2. Digital disruption is creating new opportunities – but also threats. On the one hand, technology is instrumental for realizing intelligent grids and interconnected assets; on the other hand, it introduces new threats such as the possibility of cyberattacks. The increasing interconnectivity and proximity of energy systems means that conflicts can have ripple effects on energy markets and prices. New technologies, such as batteries and grid-embedded generation, are making the cybersecurity of grid systems more vulnerable.

3. The rebalancing of energy supply and demand is leading to a new global energy security order. Dropping oil prices have led to a shift in wealth from net oil exporters to oil importers. At the same time, the development of unconventional sources of oil and gas, as well as the recent economic slowdown in emerging markets such as China and India, have contributed to price readjustments against the backdrop of a general shift in energy supply patterns. Geopolitical shifts, the new distribution of powers and energy trade flows will create challenges and opportunities for energy security in the new energy architecture.

Source: www.weforum.org

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