A new energy trends report from DNV indicates a resilient optimism within the energy sector, despite prevailing caution. According to DNV's annual ‘Industry Insight survey’, 73% of senior energy professionals express confidence in the industry's growth trajectory for the upcoming year, a figure that has remained steady at around 74% since 2022, reflecting a resolute stance amid continuing turbulence.
"The transition towards a sustainable energy future is not just desirable, it is imperative, stated Ditlev Engel, CEO energy systems at DNV. “Key drivers of optimism include the relentless march toward decarbonisation and electrification, offering long-term clarity amid near term uncertainty. Understanding this shift as a necessary progression aligns with the industry commitments under the Paris Agreement, reinforcing its determination to drive meaningful change. Consequently, the industry's optimism about the path ahead is well-founded – especially since the requisite technologies are already within our reach.”
However, beneath this apparent stability lies a complex landscape of shifting dynamics. While the industry as a whole maintains a positive outlook, specific sectors, such as electric power and renewables, have witnessed notable declines from previous peaks.
DNV's survey stresses that nearly two-thirds of the energy sector view global political uncertainty as the primary threat to success over the coming year. Specifically, the study reveals that nearly two-thirds (62%) of respondents perceive the 2024 wave of elections and potential policy shifts as one of the steepest barriers to growth. Political uncertainty, which ranked as the 13th major concern in 2022, rose to sixth place in 2023.
“For decades, the energy sector has faced enduring political risks, evolving from localized tensions to global challenges affecting every aspect of the industry”, commented Engel. “Amidst fluctuating prices, disruptions in supply chains, wavering investor confidence, and shifting regulations, stakeholders stress the importance of maintaining a long-term perspective, anchored in stable supply contracts. In this climate of uncertainty, the sector must demonstrate resilience, adaptability, and a strategic vision for the future to overcome policy ambiguities and foster economic growth, job creation, and prosperity for all. Furthermore, to effectively scale the energy transition across various industries, it's imperative to streamline and standardize processes. A key challenge is to secure lasting regulatory support and clear visibility into the future to rapidly deploy existing technologies.”
Optimism among respondents in electrical power has dipped from 87% to 76%, while renewables have experienced a similar downward trend, from 87% to 78%. This decline mirrors a broader shift in industry growth expectations and organisational confidence, with rising costs and supply chain disruptions pose significant hurdles to project viability and the pace of energy transition. Notably, the electric power industry faces a pronounced shortage of skilled talent, hindering progress in energy transition and digital initiatives. Meanwhile, renewables grapple with regulatory hurdles and intensifying market competition.
There has also been a fall in optimism about organisational decarbonisation targets among survey respondents, with the majority (62%) believing that financial costs are the greatest barrier to reaching the goals of the Paris Agreement.
“The price of carbon is still too low globally, and the political difficulty of having energy consumers face the cost of carbon in their everyday decisions is one of the reasons why the energy transition will move slower than many people hope,” says Eirik Wærness, senior VP and chief economist, head of Global External Analysis at Equinor. “So carbon border adjustment mechanisms are needed to encourage every government around the world to put a price on carbon. That is easier said than done, particularly in emerging market democracies, where there are so many urgent priorities.”
The oil and gas sector however has undergone a resurgence in confidence, rising from 58% in 2022 to 68% in 2024. This recovery reflects the industry's pivotal role in meeting global energy demand while navigating the transition to cleaner fuels. Established oil and gas companies have also gained from branching out into decarbonisation and renewable energy.
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