Growth of Renewable Energy Technology
Area of Impact
Oil & Gas; Renewable Energy & Fuels
Competitive Market Analysis
App Functions Used
Forensic Environment; Momentum Circumplex
As the effects of Climate Change become more apparent developments in renewable technology are making the sector more competitive. This is expected to have an impact on the Oil and Gas industry. The energy industry as a collective needs to understand the latest developments and track the growth patterns of renewables.
Insights gained from Decision Point
- Oil supermajors present mixed forecasts for oil demand.
- Supermajors are investing more in renewables and renewable related technologies.
- European market is under more pressure to diversify its energy base than the United States.
- There is a “push to market” trend in the EU for renewable energy. (Disruptive Technology Momentum)
- Social and Political Momentum for renewable energy indicates a positive trajectory; Renewables have significant presence in ‘politics’, and the ‘solution’, ‘debate’, and ‘hope’ zones of the circumplex.
- Offshore oil and gas expected to focus on natural gas instead of oil, with an investment shift towards wind power.
- New solar technologies are emerging, Concentrated Solar Power has seen significant developments.
- Perovskites are providing an alternative to silicon solar panels and increasing efficiency.
- Solar attracted more investment than any technology in 2017.
- Wind power is becoming more efficient and competitive.
What are the latest developments in renewable energy technology and how might this affect the business strategies of major oil and gas providers?
The Forensic Environment tool facilitates an investigation into the effects of renewable technologies on the Oil and Gas industry. The Forensic Environment bellow looks at Solar Power, Wind Power, and Renewables in general as Behaviors in the Oil and Gas industry.
To proxy the Oil and Gas industry the environments selected were, Oil, Gas, BP (Beyond Petroleum), and Shell (Royal Dutch Shell).
Major Oil and Gas companies are diversifying their portfolios to include more renewable technologies. This reflects the changes in the energy market and an attempt to capture new sectors of demand as the market becomes more competitive.
While many of the major companies are diversifying, they do not agree on the demand forecasts for oil and gas.
BP expects oil demand to peak in the next decade, while Exxon have been accused of underestimating the changes to the energy sector. The divergence in demand expectations is reflected in the divergence in renewable strategies, with Shell becoming a leader in renewable technology.
The divergence in demand forecasts is partly explained by regional differences. The European market is under more pressure to diversify than the US market. This explains why BP and Shell are at the forefront of energy diversification, as shown by the supporting data.
The geographical divergence in the Oil and Gas market between Europe and the United States is reflected in the Disruptive Technology Momentum tool.
In the United States there is a push to market trend (over the period 01/01/2018 – 10/10/2018) demonstrating the pressures of renewable technology do exist in the market. However, the same Push to Market trend in Europe is accompanied by supporting data in the ‘Innovation’, ‘Defining Application, and ‘Defining Value’ zones suggesting there is a greater degree of innovation in the European market.
This data is matched by a global Social and Political Momentum largely supportive of renewable technology.
Renewable energy is predominantly located in the Politics zone indicating the intensity of discussion around the topic. Significantly, it is also found in the Solution, Debate, and Hope zones signifying the expected changes to the global energy market. The location of data in the debate zones also indicates that the pace of change may be limited as this corresponds to the passive active reality hemisphere.
To understand the changes in the Oil and Gas industry driven by renewable technology adoption it is necessary to understand the developments and investment trends in the renewable sector. The following Forensic Environment explores this.
The environments are set as: Solar Power, Wind Power, Nuclear Power, and Renewable. With the behaviors Development, Technology, and Investment allowing technological changes in these sectors of the renewable market to be explored.
The Forensic Environment reveals a number of technological developments in Solar Power with potential market impacts.
Concentrated Solar Power has seen breakthroughs in efficiency with operating temperatures raised to 1,000 oC from 565 oC. This may have a significant impact on the competitiveness of solar technology.
A further development is revealed, with Perovskite materials being introduced as a potential replacement or alternative to silicon in the production of Solar Panels. Perovskites are thought to be able to transform the solar power business, with perovskite and silicon combined panels (tandem cells) already increasing efficiency by 20-30%.
This has resulted in Oxford Photovoltaics taking the tandem cells to market in Germany, with production starting in the next year.
These developments in solar technology can be expected to continue since solar technology has attracted more investment than any technology over the course of 2017.
Falling costs of solar power is seen as central to the continued deployment of the technology.
Wind Power is also becoming more efficient and competitive. New turbines have been found to be effective even in low winds. This means the placement area for wind turbines can be increased with previously unsuitable locations now appropriate for power generation. This is particularly significant for land-based wind turbines.
Wind power is also making an impact offshore. Significantly for the Oil and Gas industry the offshore sector is expected to move away from oil as it focuses on gas and increasingly wind power. With a quarter of the world’s oil supply coming from offshore fields this may be a significant development in the energy market and balance between renewables and traditional fossil fuels.
Each of the developments in renewable technology identified using the Decision Point application can be monitored going forward. With Decision Point it is possible to create Custom Decision Point Indicators (DPIs) that track causation elements connected to custom designed parameters. This means research doesn’t stop here. Decision Point provides access to the ever expanding knowledge base of the QRM and C+8 Data Model, meaning insight gained is always built upon allowing decision makers to remain informed on what matters to them.