Disruption Is Now report reveals three trends transforming the energy and resources sector
Arthur D. Little’s 2022 energy flagship report, Disruption Is Now, draws attention to key trends that are currently shaping the energy and resources industry as it transitions with great ambitions toward net-zero. The report identifies three trends – decarbonization, decentralization, and digitalization - that is transforming the energy and resources sector and brings more opportunities than challenges for companies that get ahead of transformation.
As part of the analysis, Arthur D. Little reviewed the investments being made by traditional companies across many different sectors, including both upstream and downstream oil and gas, 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 the 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.
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 catalysing 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.
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.