Major New Global Energy Transition Research Report Launched
LONDON, May 13, 2020 /PRNewswire/ -- A new report by international law firm Ashurst found that 88% of business leaders from across the G20 have changed their organisations' investment strategies over the past year to align more closely with the low-carbon energy transition.
The report, Powering Change: Energy in Transition, compiles the views of more than 2,000 senior business leaders from across G20 countries on the changing global energy market as organisations seek to meet rising energy demand and a drive towards decarbonisation.
The research explored attitudes towards and investment behaviours in renewable power generation and decarbonisation technologies in both the regions and countries in which the respondents are based, and in other jurisdictions in which they invest or plan to do so in the future.
It showed that North America, the Middle East, and South America are the current hotspot regions for investment in the energy transition. When adding current plus new investment plans over the next five years, these three hotspot regions are joined by North Africa and South East Asia.
According to Ashurst's research, the vast majority of respondents (87%) cited either significant or extreme pressure from government to act on climate change.
Paradoxically, around one third (31%) of respondents cited a lack of government support as one of the most significant barriers to low-carbon investment. Respondents from China and India indicated political support as a driving factor more so than any other countries across the G20 – 46% and 43% of respondents respectively. By contrast, only 19% of respondents from Indonesia and 18% of respondents from Turkey highlighted political support as a driving factor– lower than any others across the G20.
The research also identified the technologies with the highest present and future investment levels among the companies surveyed, as reflected by current and committed or anticipated future spend. Solar was identified as the renewable power technology with the highest levels of current and committed investment, followed by hydro and onshore wind. Conversely, technologies with lower levels of current investment but high levels of potential include biomass and offshore wind. In terms of non-power generation technologies, battery storage and electric vehicles receive the highest current and committed investment, but energy trading, carbon capture, utilisation and storage (CCUS), hydrogen and smart meters are regarded the areas with the highest potential in the next five years.
Antony Skinner, Ashurst's head of power & utilities for EMEA/US, said:
"The effects of climate change can no longer be ignored. Addressing its impacts has become a priority for businesses, governments and individuals alike. As the energy transition takes place, with increasing emphasis on cleaner and renewable technology, energy supply is under more scrutiny than ever before.
"Some parties have a first-mover advantage while others are taking their first, tentative steps in their contribution to a carbon neutral economy. With the onset of COVID-19 and the sharp reduction in oil prices, this is clearly a volatile and uncertain period for all markets, especially energy. However the fundamentals of the market and prospects for the clean energy transition will likely remain largely unchanged in the longer term.
"This report highlights the global opportunities as the transition accelerates, and investors and society place growing pressure on corporates and governments to take more assertive action."
David Wadham, Ashurst's head of power & utilities for APAC, added:
"Governments and businesses are significantly increasing the attention they pay to the low-carbon transition - the global growth in renewable energy investment is testament to this. Our research shows that energy producers and users worldwide are feeling Government and societal pressure to decarbonise and, as a result, over the past 12 months the vast majority have begun to adapt their investment plans accordingly.
"This data challenges any notion that the larger developing economies are only interested in fossil-fuel based energy production: there is real interest in low-carbon investments across the board."