The energy and natural resources industries have been undergoing a variety of changes in the past few years. This has led to many companies feeling as though they’re on shaky ground. In the past few years, however, there have been a few trends that have made themselves increasingly more obvious.
By taking note and adapting to these changes, the majority of businesses will be able to adapt to them to stay competitive. While some may require a fundamental shift in focus, others will help with this. Regardless of whether they’ll hamper or promote a company, there are a few key trends that every energy entrepreneur should be aware of.
Key Energy & Natural Resources Industry Trends
Effective Energy Storage
With clean energy usage being more in demand, consumers look for less wastage. This means that companies will need to promote better energy management and storage across the board. Grid flexibility is vital to this, as it allows energy firms to balance supply and demand in a shifting market.
Manufacturing and industrial sectors may end up drawing on more diverse sources of energy. Much of this will be focused on the management of clean energy, as well as its related storage. This doesn’t have to be a negative for energy companies, however.
Instead, energy storage’s viability has become increasingly more effective, which should mean that they’ll be able to work regardless of timing or weather conditions. With this increased supply, as well as the greater demand, it should be a net positive for everybody involved.
Dealing with, and analyzing, large amounts of information have become increasingly common. While this has become a trend itself, it has driven the use of artificial intelligence (AI) across a variety of areas. This not only collects the data in question but better helps firms to understand and base strategies on it.
This is driven by the fact that AI will be able to answer the ‘what,’ ‘who,’ and why of a particular problem. In many cases, this means that energy and mining companies will be able to overcome any issues before they occur. Alongside this is the fact that production should be sped up, as well as being more accurate.
These should result in companies becoming much more cost effective in may areas. This is especially true when it comes to big data, as AI will be able to parse through and understand large swathes of information quickly.
The resulting recommendations and predictions that are made will help management to make more informed and accurate decisions. This will be seen in both the long-term and the short-term.
Solar power has become increasingly popular across the country, with the energy supply looking to reach grid parity in 42 states by 2020. This is a trend that is set to keep continuing, eventually becoming a parity in the entire country within the next few years.
This is tied directly to technological advances, as the grid will be more efficiently rolled out across states with a minimum of resources. Alongside this will be a net saving in revenues over the long-term, despite the need for short-term investments.
Much of this should be balanced out by the fact that consumers are increasingly looking for sustainable electricity. Currently, it seems as though supply simply needs to catch up with the overall market. This means that certain companies will be able to capitalize on this by entering quickly and efficiently.
Climate Action Plans
Climate change is mandating that companies, and countries, begin taking action to reduce CO2 emissions. This has fed into renewable energy becoming more popular, with states across the country becoming more reliant on solar and wind power.
This is partly tied to the grid parity trend, in that consumers are demanding greater access to environmentally-friendly energy. While this currently only affects certain cities, the amount is growing, making it an ever-growing market.
The proposed Green New Deal may also play a part in this. While the proposal has been slow to take off, it may soon begin picking up steam, which will have large implications for many energy companies. By starting to switch to renewable energy early, firms should be able to avoid much of this.
Blockchain technology allows for the buy and sell without any environmental effects. This will enable the customers to buy and sell energy at optimal times, with this being driven by the IoT and related devices. As such, it can boost the performance of energy saving devices.
This is a type of peer to peer network that effectively allows customers to trade energy. This may be done with the energy company itself, or even from customer to customer. Either way, this means that the majority of firms will need to capitalize on this emerging market.
This can all be done in real-time settings. Alongside this is the transparency that the blockchain network provides, which may prove to be beneficial to both businesses and their customers. This may subsequently help to improve relations between the two.
Supply Chain Digitization
Technologies such as the IoT and artificial intelligence are continuing to disrupt the supply chain, with this being positive. Energy suppliers will be able to improve operations while being capable of making more informed and accurate decisions.
This digitization is being seen in a variety of other areas too. For example, robotics can cut down on the amount of time and labor needed during production while maintaining, or improving, accuracy. As each of these pieces of equipment will be interconnected, they’ll also be able to monitor each other and provide status reports.
This could subsequently reduce breakdowns and improve uptime, as machinery will be less likely to breakdown after getting preemptive repairs.
Inclusivity and diversity in the mining and energy worlds have changed drastically in recent years. While companies are more focused on these, it may be a long time coming, as potential employees are relatively scarce.
As diverse and talented candidates are scarce, companies will need to put more effort into making their business more appealing. While gender quotas and others may play a role, it may take much more than this to attract these workers.
Often, this could mean a cultural shift within a company, and possibly the industry itself. This means cultivating new behaviors, policies, and even attitudes. Should this be done, then a company may begin to see their overall workplace improve while meeting diversity guidelines.
Batteries Take The Lead
Batteries have evolved considerably over the past few years, with this showing no sign of slowing. The need for better storage drives this, and battery technology has become increasingly more innovative recently. This has led to rapid improvements with the technology, with battery life and output being expanded.
Tesla, for example, has already shown that large scale batteries can provide a large ROI for many companies. While this would be quite a considerable investment, this should result in more cost-effective energy delivery, while also reducing prices for consumers.
With electric cars becoming even more common, this opens up another potential avenue for profit, especially if the grid is already in place. This means that energy companies who focus on improving their electrical output this way could see several rewards stacked up.
Renewable energy has been a trend for the past several years. Unlike many others, this shows no signs of going away. Shortly, it’s predicted that solar, wind, and water power will continue to grow. This means that energy companies will need to place greater emphasis on their renewable energy offerings over time.
What compounds this is the fact that consumers are increasingly demanding renewable energy. As a result, it’s a market that wants to be capitalized on quickly.
With technology playing increasingly large roles across the entire industry, companies have had to switch gears and begin focusing on technologically-minded hires. While there is somewhat of a skill shortage, many firms are getting around this by offering training to new and prospective hires.
Another way that companies are aiming to get around these skill shortages is through attracting qualified candidates from other industries. While this may be somewhat difficult, computer engineers, data programmers, and more have all been shown to be beneficial for many in the energy sector.
Alongside the trends that have been affecting the industry, a few other factors have made themselves evident. Much of this can be highlighted in a few statistics, with some being tied directly to the trends affecting the industry as a whole. Some of the more prominent of these are:
- Over 100 cities rely on clean energy for 70% of their energy needs.
- 40 cities are 100% reliant on clean energy.
- Solar grid parity is expected in 42 states by 2020.
- Cities account for 70% of energy-related CO2 emissions.
- Crude oil production has increased by 16.5%.
- 10% increase in U.S. gas consumption.
- The electrical contribution of BRICS in power consumption has increased 72%.
- CO2 fuel consumption in the U.S. has increased 3.1%.
- China’s energy consumption has grown 3.7%.
- Oil consumption in Latin America has decreased 3.3%.
Knowledge is a vital part of preparing for the future. This means that every business needs to be as informed as possible when planning. By focusing on each of the key areas above, the majority of companies will be able to overcome and avoid many of the obstacles that look to present themselves.
This means that energy and mining companies will need to assess their current capabilities and begin adjusting based on their shortcomings. While this may then dictate some large upfront investments, they should then start seeing the rewards over the long-term.