(MENAFN- mslgroup) The next decade will witness some of the most exciting and transformative years in the energy and resources industry’s history. In their 2022 energy flagship report, Disruption Is Now, Arthur D. Little (ADL), the world’s first management consulting firm, draws attention to key trends that are currently shaping the energy and resources industry as it transitions with great ambitions toward net-zero.
Below are the three trends listed in the report:
• Decarbonization will be the most important overarching trend for all sectors and the world in general. It is already having a fundamental impact on the strategic thinking and future investment decisions of companies in all sectors.
• Decentralization for a far more localized solution in favor of service delivery rather than a reliance on a much wider national or regional infrastructure. The mission then for energy grid firms is to create future-proof energy infrastructures that can accommodate technologies such as intermittent and decentralized generation.
• Digitization or the need to digitize operations to enhance efficiency, thereby reducing costs, increasing revenue stream by diversifying into new products and services as well as improving customer experience are increasingly important for energy players and fundamental to their transformation.
As part of the analysis, Arthur D. Little has reviewed in detail the investments being made by traditional companies across many different sectors, including both upstream and downstream oil and gas (O&G), power generation, networks and infrastructure, customer services and solutions, waste, water, and metals and mining.
Evidently the energy and resources sector will need to go through a period of unprecedented change if they are to be fit-for-purpose in an increasingly decarbonized, decentralized, and digitalized world. The research, trends and insights recorded in Arthur D. Little’s report provide a toolkit to help energy and resources industry to start thinking through, and moving towards, their vision of future success, with a need for companies and governments to assess their day-to-day operations and longer-term strategic decisions.
The way in which energy and resources sector position themselves today in preparation for transformation, will determine their sustainability, and could make or break their competitive advantage over the next decade. The report brings to light key trends focused on effecting transformation to help companies start thinking differently and in a way that is often at odds with their traditional working methods.
Adnan Merhaba, Partner, Energy & Utilities Practice Lead, Arthur D. Little Middle East said: “No one-size strategy can fit all – for some energy players, the journey will mean thoroughly evaluating their global and regional assets to determine those that are at risk of being stranded, and then divesting accordingly. For others, the focus will be on diversification, building outward from their existing competencies by adding new capabilities, or creating risk-sharing partnerships that enable them to exploit new opportunities. For most, achieving greater operational efficiency by embracing digitization and significantly reducing its carbon footprint to meet increasing demands from investors and shareholders will be the only way forward to quickly adapt to changing market conditions.”
One of the market segments touched upon in the report is Hydrogen economy that is touted to become a $700 billion economy by 2050, with green hydrogen expected to take a dominant share. Within the region, governments have made progressive strides to support the transition toward a greener future in hard-to decarbonize sectors. Recently, the UAE has joined forces with the Netherlands to boost its research and efforts on hydrogen energy. Such partnerships contribute to catalyzing the transition towards hydrogen energy and support the two countries' orientation in formulating projects and initiatives to support the Paris Agreement on Climate Change. Germany and KSA announced a strategic alliance on green hydrogen development to collaborate on the generation, processing, use, and transportation of clean hydrogen for the benefit of both countries. This partnership will help Germany maintain its technology leadership as well as attain policy targets. As for KSA, the alliance will help bolster it as a global producer of green hydrogen.
“Hydrogen is decidedly playing a key role in the diversification of GCC economies and shows great promise for the region to become a hub of green energy as we accelerate into an energy transition in accordance with sustainable and development goals. The increasing number of advanced use cases makes clean hydrogen a key decarbonization measure and contributor to the realization of a circular economy at the benefit of all stakeholders involved in the value chain” commented Carlo Stella, Partner, Energy & Utilities Practice, Arthur D. Little Middle East.
Including insights from companies gathered over the last year, the report showcases Arthur D. Little’s own research into global energy practices. These together give a sense of what progress is being made toward a decarbonized future, which challenges still lie ahead, and the impacts on energy and utility players along the entire value chain.
Disruption is Now displays rich perspectives by key GCC industry experts and their experience in key organization such as ADNOC Group and BEEAH Tandeef and complements global contributions by offering a regional lens.
Legal Disclaimer: MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.