Energy Transition Report 2018

TR & NSITION ENERGY

ENERGY TRANSITION OUTLOOK 2018

The changing business environment for energy companies Oil and gas business are already responding to the changing requirements of consumers, investors and current and potential employees. Retaining investor confidence and recruitment are a key challenge to the delivery of Vision 2035 and the long-term future of the sector in the UK. Changing attitudes in society Although demand for oil and gas has been maintained, the attractiveness of the oil and gas sector among potential employees and investors has declined. At best, it is clear that the sector is now competing for interest with a wider range of innovative technologies, as shown below. Although investment in fossil fuels continues to be needed, renewable investment is catching up quickly. Whereas among some groups there exists an unreceptive attitude, several active campaigns, both globally and in the UK, to persuade public bodies, universities and churches to divest from fossil fuel activities. This has, to some extent crossed over into the criteria of some institutional investors such as pension funds and insurance providers.

This change in attitudes is not all-pervading but the erosion of the pool of possible investors and employees will certainly have some impact. This needs to be continually addressed especially in the industry’s core constituencies.

Investment in Fuel Sources Required to Meet IEA Sustainable Development Scenario 13

2010-2016

2017-2040

Other low-Carbon

Transmission and Distribution

Renewables

Fossil Fuels

Global Energy Investment by type to reach the sustainable development scenario ($2016bn pa)

0

200

400

600

800

1000

1200

13 IEA — World Energy Outlook 2017

14