2024年能源行业展望

ENERGYINDUSTRYOUTLOOK2024

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CONTENTS

Executivesummary4

Stateoftheindustry6

Short-termoutlook7

Long-termoutlook10

Potentialriskstogrowth12

Emergingtrends14

Balanceofgrowthandsustainability17

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EXECUTIVESUMMARY

Theenergyindustrymustbalancecompetingforcesasitworkstomeetgrowingdemandandmanagethetransitiontonetzero

emissions(Figure1).Globalenergydemandis

projectedtoreach

740millionterajoulesby2040,a77%increasefrom2000levels.Inaddition,electricitydemandispredictedtogrowbetween3%and4%ayear,potentially

morethandoublingfrom25,000terawatts

today

toarangeof52,000terawattsto

71,000terawattsby2050.Industryforecastersgazingthroughagreenlensestimate

new

investment

inpowergenerationto

reach$3

trillion

globallyin2024,ledby$2trillionin

cleanenergy,whilefossilfuelisexpectedtodecline.Whilethedirectionmaybeaccurate,marketrealitieswillaffectthetimingand

magnitudeofthistransition.Longleadtimesforpermittingandconstructingnuclearandconventionalenergyplantslikehydroelectricfacilitiesarepushingcompaniestoward

alternativessuchasnaturalgas-firedplantsthatcanbesetupmorerapidly,alongwithgreen,renewableenergy.

Theenergyindustrymustbalance

competingforcestomeetgrowingdemandandmanagethetransitiontonetzero.

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Theenergymixoftomorrowwilldifferfromwhatweseetoday,assustainablefuels

willaddresssectorsdifficulttoelectrifylikeshipping,aviation,andheavyindustries.

Energystoragewillattractsignificant

investmentsduetotheunpredictabilityof

renewableenergysources.Carboncapture

andstorage(CCS)willaddressemissionsfromfossilfuel-poweredplants.

Beyondenergytransition,two

CEOpriorities

aretheuseofgenerativeAItocreateanAI-enabledorganizationandfurtheradoptionofdigitaltechnologiestostaycompetitiveandprofitable.

Ourforecast

forgenerativeAIspendingbyenergy,mining,andutilities

isforittogrowfrom$571millionin2023

tomorethan$1billionin2024.Generative

AIwillbeusedacrosstheenergyvalue

chain,fromupstreamsourcesofmaterials

topowergeneration.AIwillbeemployedtoextractvaluefromexistingcorebusinesses,

pivottowardthecreationofnewrevenue

streams,andacceleratethetimetomarketfornewofferings.

AIwillenhancetheefficiency,safety,andreliabilityoftheenergysector.

Figure1.Thedrivingforcesbehinddemandforoilandgas

•Populationgrowth

•Urbanization

•Travel

OPECprediction:

from100millionbpdin

2022to116bpdby2045

•Alternate,biofuels:60%ofavoidedoildemandby2028

8

•DisruptionslikeCovid-19

•Energyeiciency

•EVs:6millionbpddropby2030

•Windenergy

•Solarandnaturalgas:

1millionbpddropby2030

Source:Infosys

(bpd-barrelsperday)

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STATEOFTHEINDUSTRY

Fossilfuelsprovidednearly80%ofthe

world’senergydemandin2023(Figure2).TheInternationalEnergyAgency(IEA)hasforecastthatglobaldemandforoilandgaswill

peakby2030

.However,notallexpertsagreewiththisprojection.Inits2023

WorldOilOutlook

publication

,OPECsaid

itexpectedglobaldemandtoreach116

millionbarrelsperday(bpd)by2045,up

fromapproximately100millionbpdin2022.

Globaldisruptions,suchasRussia’swar

againstUkraine,havepushedtheIEA’speakdemandforecastdateforwardandforced

energyleaderstoreconsidertheirstrategies.Europeancountriesrestartedsomecoal-firedpowerplantstemporarily,extendingtheir

planneddecommissiondates.Meanwhile,

countriescontinuetoinvestinrenewable

sourcesfortheirownenergysecurityandtoreducetheirdependenceonimportedcrudeoilandnaturalgas.Combinedinvestmentsinrenewableenergyovertookspending

onfossilfuelsforthefirsttimein2023.

Naturalgasandsolarenergyforelectricity

generationwill

reducethedemandforoilby

1.1millionbpdby2030.

Figure2.Globalenergymix2023

D

1%

2%1%

4%

30%

6%

22%

25%

3%

6%

Oil

Gas

Nuclear

Coal

BiomassSolar

Otherrenewables

HydropowerWind

Biofuels

Source:

OurWorldinData

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SHORT-TERMOUTLOOK

Twocurrentprioritiesfortheenergysectorarerenewablesandenergytransition.Intheshortterm,oilproductionandnaturalgas

asatransitionfuelremainapriority,with

investmentsinrenewablesandelectrificationofmobilitygainingmomentum(Figure3).

Additionally,oilproductionisnegativelyimpactedbygeopoliticalfactors,includingRussia’swaragainstUkraine,Israel’swar

againstHamas,andotherMiddleEast

conflicts,aswellasbyshiftstoalternativeenergysources.

Figure3.Topgrowthareasfortheenergyindustry

Short-term

1Ongoingoilproduction

2Therushtonaturalgas

3Electriicationofmobility

Source:Infosys

4

Long-term

Sustainablefuels

5Energystorageinnovations

6Carboncaptureandstorage

7Supplychainresilience

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Energytransition

Theenergysectorwasresponsiblefor

40%of

theCO2

emittedworldwidein2023,withcoalbeingthebiggestcontributor.

Energy-related

carbonemissions

grewby1.1%in2023,

despitesignificantandgrowinginvestmentsintherenewablesector.Tomeetnetzero

targets,thisgrowthmustbehaltedandevenreversed.Toachievethesegoals,countries

andenergycompaniesneedtoreduce

theirinvestmentsinfossilfuel-firedpowerplantsandcommittotimelinesforshuttingdownthesefacilities.However,regulators,utilities,andgridoperatorsmuststillensurethatpowergenerationstaysbalancedatalltimestomatchsupplywithdemand,and

cleanenergyonitsownhasyettoprovideasufficientconfidencetodoso.

Oilproduction

OPECwasthelargestproducerofcrudeoilin2023,accountingformorethanone-thirdofthetotalglobaloutput,or34millionbpd.For2024,OPECprojectedanaveragedailyproductionofabout30millionbpdamongitsmembercountries.However,inthethirdquarterof2024,OPEC

cutitsdailygrowth

forecast

from2.25millionbpdto2.11millionbpdduetosofteningdemandfromChina.Theorganizationalsolowereditsdemand

growthestimatefor2025to1.78millionbpdfrom1.85millionbpd.

Globalrisksandotherfactorsarelikelyto

reduceoilproductionoutlooks—from

geopoliticaltensionsinmajoroil-producingregionstoeconomicslowdownsin

significantconsumermarketssuchasthe

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USandChina,toongoingclimatepoliciesaimedatreducingfossilfueldependence.Some

geopoliticalrisks

includetheconflictintheMiddleEastanditsescalation,SaudiArabiaandRussiaextendingorincreasingoilproductioncuts,USshaleoilindustry

inabilitytomeetdemand,andpoorChineseeconomicperformance.

Rushtonaturalgas

Naturalgasprovidesroughlyaquarterof

theelectricityproducedglobally,trailing

coalwhichproducesone-thirdofthetotal

poweroutput.Themarketfornaturalgas

powerplantsis

expectedtogrow

1.5%peryearthrough2025duetoindustrialdemand,fast-growingAsianeconomies,andgas-richcountriesintheMiddleEastandAfrica.Theannual

investmentrequiredfornaturalgas

supplyandtransportationthrough2030is$280billion,andasidechallengeistheneedtodecreaseemissionsintensityaswell.

Naturalgasisefficienttostoreandtransportthroughpipelinesorviashipsinaliquefiedstate.Itisalsohighlyeffectiveatproducingelectricity,upto60%efficiencyincombined

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cyclepowerplants.Also,naturalgasplantsarerelativelyeasytostartandstopto

respondtofluctuatingdemand.However,althoughnaturalgasgeneratessignificantlylesscarbonemissionsthanotherfossilfuels,itsbyproductmethanerepresentsapotentgreenhousegas(GHG).

Thisflexibilityandloweremissionshave

earnednaturalgasthereputationasa

transitionfuel,incontrasttohydrogen,

ammonia,biofuels,andothersthatrequireadditionalinnovationandscaletobecomemorefeasibleenergysources.Majoroil

companiesareinvestingsignificantlyin

liquefiednaturalgas(LNG)plants.A

wave

ofnewLNGprojects

isexpectedtostart

operationsinmid-2025,witharecord

increaseof64millionmetrictonsofannualliquefactioncapacity.ThistrendispoweredbycompanieslikeMaersk,aleadingshippingcompanythathasswitchedfrombiofuels

toLNGforits

fleetmodernization

anddecarbonizationefforts.Othershippingcompaniesareexpectedtofollow.

Challengeswithnaturalgas-firedpower

plantsincludefuelpricevariabilitydueto

marketfluctuations,highinitialinfrastructurecostsforstorageandtransportation,and

methaneleaksthatcanoffsetitsclimatebenefitsovercoal.

Electrificationofmobility

Electricvehicles(EVs)arebecomingmore

mainstream:globalEVenergyconsumptionwas

lessthan1%in2023

butisexpectedtoreachbetween6%and8%by2035.Since

thetransportationsectoraccountsfor25%ofglobalcarbonemissions—and

39%

intheUS

—thisshifttoelectrificationis

animportantpillarinthedecarbonization

journey,particularlywhenrenewablesourcesareusedtopowerEVs.Oneestimatefor

the

reductioninoildemand

duetoEVsis6millionbpdby2030,basedonexistingpoliciesandtrends.

Itsflexibilityandloweremissionshaveearnednaturalgasthereputationasatransitionfuel.

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LONG-TERMOUTLOOK

Inthemediumtolong-term,promising

innovationsareemerginginmanyareas:

hydrogenandothersustainablefuels,

energystorage,CCS,andglobalsupplychainmanagement.

Sustainablefuels

Theongoingimperativetoreducecarbonemissionsandfossilfueldependencehas

acceleratedthedrivetodevelopsustainablealternativefuels,withincreasedviabilitytobacktheirscientificpromiseandsocietal

purpose.

Hydrogen.Hydrogenisincreasingly

recognizedasaversatilefuel,energycarrier,andstoragesolution,particularlyforareas

hardtoelectrifylikeheavyindustryandlong-haultransportation.The

HydrogenCouncil

estimatesthatthegascouldcontributeupto20%oftheworld'senergyneedsby2050,ifsignificantinvestmentscontinuetoflow

intohydrogeninfrastructureandtechnology.However,

hydrogenhasitsownchallenges

,includinghighcostandenergy-intensive

productionthroughelectrolysisornatural

gasreforming.Ithasalowenergydensity,posingchallengesinstorage,transportation,andsafeusage.

Biofuels.Advancedbiofuels,derivedfromalgaeandwastematerials,arebecoming

morecommon.Thesefuelspromise

lowerlifecycleemissionscomparedto

traditionalbiofuels.Recentinnovations

focusonimprovingtheefficiencyandcost-effectivenessofalgae-basedfuels.Despitethebenefits,biofuelscurrentlyfacecapacity,infrastructure,andsupplychainbarriers

andarehighlydependentongovernmentpoliciesandsubsidies.Companiesarenotcommittingcapitaltotheseprojects,withlargeoilandgascompanies

backingaway

fromtheirbiofuelcapitalinvestments

.

Nevertheless,biofuelsare

projectedto

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accountfor60%

ofavoidedoildemandby2028.

Ammonia.Ammoniahasemergedasa

promisingfuel

,especiallyforshippingandpowergeneration.Ithasahighenergy

densityandpotentialforzero-emission

production.Researchisongoingtoimproveitscombustionefficiencyandreduce

nitrogenoxideemissions.Challengesindevelopingandadoptingthisfuelincludehighproductioncosts,newinfrastructurerequirements,andtechnologicalhurdles.

Hydrogenfuelrequiresexpensive

electrolyzersandextensivedistribution

systems,whilebiofuelsneedscalable

productionmethodstocompetewith

traditionalfuelseconomically.Maersk

previouslycommittedtobiofuelshipsbut

nowhaschangedtoLNGanddualfuelships.Thecompanyhasdelayedtheadoptionofbiofuelshipsduetoalackofinfrastructure,governmentsubsidies,andsupplychain

issuesintheproductionandsupplyofbiofuels.

Energystorage

Energystoragesolutions,including

advancedbatteries,arecrucialtobalancesupplyanddemandonthegridas

intermittentrenewablesourcesincrease.Thedevelopmentofsolid-statebatteriesand

otherstorageoptionsisgainingmomentum,decreasingcost,andincreasingreliability.The

batteryenergystoragesystemsmarket

couldreach$120billionto$150billionby2030,

morethandoubleitssizein2023,according

tooneestimate.Approximately42gigawattsofbatterystoragewas

addedglobally

in

2023,ayear-over-yeargrowthof130%.

Carboncaptureandstorage

CCStechnologiesarebeingdevelopedanddeployedtomitigatecarbonemissionsfromindustrialprocessesandpowergeneration.Recentadvancementssuchasmembraneseparation,metal-organicframeworks,

andnewsolventsforpost-combustion

areimprovingefficiencyandreducingthecoststocaptureandstoreCO2.TheGlobalCCSInstituteis

tracking41projects

in

operationand351indevelopmentglobally.Carboncapturecapacityhasgrownata

compoundedannualrateofmorethan35%between2017and2023.

Supplychainresilience

Theenergyindustryissubjectto

manyrisksthatthreatensupplychains,

includingthedisruptionoffuelsupplies,

volatilecommodityprices,increasing

environmentalregulations,andaging

infrastructure.Companiescanmitigate

someofthesechallengesthroughsupplierdiversification,riskmanagementthrough

digitaltechnologies,optimizationandearlywarnings,andresiliencymeasurestomanageunexpecteddisruptions.

Supplychaindisruptionshavesignificantlyimpactedtherenewablesindustryduetonaturaldisasters,logisticsandinstallation

challenges,factorycapacityconstraints,rawmaterialshortages,andpricefluctuations.

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POTENTIALRISKSTOGROWTH

Theenergysectorfacesseveralstrategicrisks:

Climatechangeeffects.Extremeweathereventsandclimatechangecandisrupt

energyproductionandinfrastructure,suchashurricanesandfloodsdamagingoilrefineriesandpowerplants.In2017,HurricaneHarveyknockedofflineanestimated

20%oftheUS

refiningcapacity

.Tomitigatethisrisk,the

sectorshouldinvestinresilientinfrastructure,

incorporateclimateriskassessments

intoplanning,andenhanceemergencypreparedness.

Supplychaindisruptions.Theenergy

sectorisvulnerabletosupplychain

disruptions.Effectivestrategiesinclude

diversifyingsupplysources,incorporating

digitalsystemsfortransparency,optimizationandriskmanagement,investmentinlocal

productioncapabilities,andstrategicreservesdevelopment.

Regulatoryandpolicychanges.Shiftsingovernmentpoliciesandregulationsaffect

theenergysector'soperationalandfinancialstability,suchassubsidiesforfossilfuels

orrenewableenergythatcanaltermarket

dynamics.TheUSgovernment’s

methanerule

willrequirenaturalgasuserstoimplement

technologiesformeasuringandmonitoringmethaneemissions.Tonavigatetheserisks,energycompaniesshouldengageinpolicyadvocacy,conductscenarioplanning,andincreaseflexibilityintheirbusinessmodels.

Technologicaldisruptions.Rapid

advancementscanmakeexisting

technologiesobsoleteorshiftmarket

preferences.Forexample,innovations

inenergystorageorgenerationcan

reducethecompetitivenessofcurrenttechnologies.Companiescanstayahead

byinvestinginresearchanddevelopment,fosteringpartnershipswithtechnology

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innovators,andcontinuouslyevaluating

emergingtechnologies.TheInternationalRenewableEnergyAgencyemphasizesthe

importanceofinnovation

formaintainingacompetitiveedge.

Cybersecuritythreats.Astheenergy

sectorincreasinglyreliesondigitalsystems,itbecomesmorevulnerabletocyberattacksthatcancompromisedataintegrityand

disruptoperations.Theaveragenumberofcyberattacksagainstutilitieseachweek

morethandoubled

between2020and

2022worldwide,with1,101weeklyattacksregisteredin2022.Robustcybersecuritymeasures,regularsecurityaudits,and

industry-wideinformationsharingareessentialtomitigatethesethreats.

Environmentalandsocialimpactconcerns.Energyprojectscanfaceoppositionduetoenvironmental

degradation,suchasdeforestation,orsocial

issues,includingcommunitydisruption.

TheSonLahydropowerprojectinVietnam

displacedmorethan90,000people

inthemidtolate2000s.Theindustrycanmitigatetheserisksthroughtransparentstakeholderengagement,rigorousenvironmental

impactassessments,andcorporatesocial

responsibilityinitiatives.TheWorldBank

stressestheimportanceofincorporating

sustainabilityand

socialconsiderationsinto

energyprojectplanning

.

Marketvolatility.Energypricefluctuationsaffectprofitabilityandinvestmentdecisions.Geopoliticalinstability,supplyanddemand

imbalances,andeconomicconditions

contributetopricevolatility.Companiescanmanagethisvolatilitybyemployingfinancialhedgingandriskmanagementstrategies

usingriskmanagementplatforms,diversifyingtheirenergyportfolios,andoptimizing

operationalefficiency.

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EMERGINGTRENDS

Thefollowingtechnologieswillplayakeyroleinthefutureoftheenergysector,workingintandemandbeingwell-integrated(Figure4).

Integratingtailor-madeAI

AIwill

enhancetheefficiencyandreliability

oftheenergysector

byenablingpredictive

maintenance,optimizinggridoperations,andimprovingdemandforecasting.AIanalyzes

vastamountsofdataandallowscompanies

toimproveenergyproductionand

distribution.AI,includinggenerativeAI,offersvalueateachstageintheenergyvaluechain(Figure5).Oneestimateforthe

application

ofAI

intheenergysectoridentifiedmore

Figure4.Technologiesdrivingsustainablegrowthintheenergysector

●

Virtualpowerplants

•Networksofdistributedenergyresources

•Energystorage

•AIforreal-timemonitoring

IntegratingAI,machinelearningintothesystem

•Predictivemaintenance

•Visualinspectionforqualityassurance

•Safetyandreliability

Energyasaservice

•Outcome-basedbusinessmodels

•Advancedmeteringinfrastructure

•Energyexchanges

Automationwithsafetyandreliability

•Roboticsformaterialhandling

•Computervision

•Droneswithswarmengineering

Source:Infosys

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than50usecasesandamarketsizeforthetechnologyofupto$13billion.

DatacentersthathostgenerativeAIare

already

majorconsumersofelectricity

andsourcesofcarbonemissions.Energyuse

forrunningdatacenters

issettodouble

from4%ofthepowerproducedintheUStodaytomorethan9%by2030.TheenergysectorshouldfollowresponsibleAIpractices(security,explainability,fairness,privacy,

reliability,IPprotection)tocontrolcarbonemissionfromitsdatacenters.

Cybersecurity

Cyberattacksonelectricitysystems

are

increasingthreatstotheindustry—onewithsevereconsequences.Cyberattackshave

grownrapidlysince2018,reachingalarminglyhighlevelsin2024.RecentcyberattackshavedisruptedenergymetersduetoITsystem

unavailability,disabledremotecontrol

systemsforwindturbines,andcreated

databreachesthatleakedcriticalcustomer

information.Theaveragecostofadata

breach

hitanewrecordhigh

of$4.9millionin

2024,a10%increaseoverthepreviousyear.

Virtualpowerplants

Virtualpowerplants(VPPs)haveemergedbeyondanovelconcepttobecomea

leadinghopeofpeakpowerdemand

management.Thesenetworksof

decentralized,distributedenergyresourcesincludesolarpanels,windturbines,

batteries,orelectricvehicles.VPPsintegrateandcollectivelymanagetheseresources

tofunctionasasinglepowerplantthat

generateselectricityandrespondsto

demand.VPPsmanageandcontrolallthepowersourceproductionanddistributiontothesmartgrid,whichmaximizes

therenewableenergymix,reduces

peakdemandload,andovercomestheintermittentnatureofrenewableenergy.

Theuseofenergystorageisontherise,andVPPsareincreasinglyemployedtoflattenthefluctuationsinpowerdemandandsupply.Forexample,Tesla’sVPP

aggregatesthousandsof

batteries

usedathometosupportthelocal

gridondemand.

Figure5.TheenergyvaluechainandgenerativeAIusecases

Theoilandgasvaluechain

TransmissionRenewableCarboncapture

UpstreamMidstreamDownstreamanddistributionenergyandstorage

•Explorationand

optimizedproduction

Source:Infosys

•Pipelineinspection

•Reineryandpowerplant

operation,preventivemaintenance

•Gridmanagementtobalancesupplyanddemand,lastmileassetinspection

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Energyasaservice

Intheasset-intensiveenergyindustry—

withitshighupfrontcosts—energyas

aservice(EaaS)caneasethebudgetary

strainwithitssubscription-basedbusiness

model.Ascustomerspayanagreed-upon

rateandfrequencyforeachunitofpower

generated,accordingtocontractualterms

andconditions,thecostofoperatingapowerplantbecomesanoperatingexpenseinsteadofacapitalinvestment.EaaSispopularfor

renewableenergy,withlesscomplexfinancialmodelsandlowerinvestment.

Outcome-basedpricingisamoreadvancedversionofthisEaaSbusinessmodel,whereequipmentmakersguaranteespecific

performanceoutcomessuchasequipmentuptimeandrepairtime.Notmeeting

outcomescanleadtoapenalty,while

outperformingthemcanresultinincentives.GEVernovaseestheoutcomeasaservice

businessmodel

offeringsignificantpromise

totheenergyindustrythatneedsaninternalculturalshift.

EaaSmarket

sizewasestimatedatonly$77.5millionin2023,yetprojectedtogrowfrom

$85.6millionin2024to$208.2millionby

2032,atacompoundannualgrowthrateof11.7%.Morethan40%ofthemarketshareisexpectedtobeinNorthAmerica.

Safe,reliableautomation

TheElectricPowerResearchInstitute

considers

safetyandreliability

important

parametersforadoptingemerging

technologiessuchasAI.Robotsareused

forhandlinghazardousmaterialsinpower

plants,andsimilarly,mobilerobotsareusedforinspectingradioactiveareasinnuclear

plants.Theoperationandmaintenancecostsforanuclearplantaccountforupto70%ofthetotalcost,withlaboraccountingfor50%ofthattotal.Mobileinspectionrobotswill