Regulations Can Be a Nightmare
Ask any expert, “What is the biggest challenge for the energy sector in 2022?” I am sure you will get an answer related to escalating government regulations. It is not just regulations; the dynamism that they present complicates matters. Energy is one of the most regulated resources currently. Regulations have their benefits, but adopting the recommendations and remaining profitable can be a challenge for many industry players. During an energy-related seminar in Brisbane Australia, participants were asked to name the biggest regulatory challenge. Majority were concerned about the integration of distributed energy resources and renewables. Another issue was the regulations and the energy market being out of tune. Unpredictable government investment and policy uncertainty were also cited.
Low Carbon Requirement
Everywhere you go, stakeholders in the industry are talking about the low-carbon agenda. The goal of limiting the global warming rate to below 2 degrees has finally caught up with the industry. With over 40% of the carbon dioxide emissions emanating from the energy industry, a goal in the line of COP21 was long overdue. Many countries are at the forefront promoting cleaner energy supplies, and this creates some challenges. Innovating and adapting to these requirements is an expensive and tedious process. Since we are talking about serious risks to Mother Nature, there are no options though. Business models within this industry must henceforth align themselves to this goal.
Energy and Affordability
Accessibility of energy to more people is one thing; the question of sustained affordability is a perpetual worry for stakeholders in the energy sector. So critical are the issues that the UN Sustainable Development Goals already incorporated them. Interestingly, even the developed economies are encountering this problem. You can tell there is disconnect between affordability and environmental sustainability by looking at the 2019 Energy Trilemma Index.
Where are the Opportunities?
Challenges in any market traditionally create an array of opportunities. That is the case in the energy market. A gas trading that is more liberal, the impetus for optimized energy and the dynamics introduced by wind and solar have brought flexibility. Innovative players have been able to capitalize on these dynamics. These dynamics are affecting all cadres, from job seekers to multi-national investors. Breaking down the industry a little bit, here are the areas of focus:
- Upstream sector- natural gas and oil drilling
- Midstream sector- processing and pipelines
- Downstream – chemical companies and refineries
- Integrated energy firms- for example Total and ExxonMobil Corporation
- Utility companies- natural gas, electricity
In regards to the prevailing business environment and mentioned challenges, these sectors are inevitably experiencing substantial changes. One of the solutions to the challenges is to leverage on advanced technology and relevant talent. Such strategies present avenues for growth for the next decade or so. The impact of technology on energy industry has particularly been momentous. Technological advancement has given rise to trends such as Industrial Internet of Things (IIoT), advanced analytics for energy data and optimal utilization of assets
Optimize your production by cutting the costs
The main challenge in all types of industry is to reduce the costs lower level, with a high level of availability of your asset without ruining your working capital and procurement and maintenance budget. Because this is your challenge we do have the experience in the fields that allow us to help you to optimize your asset of production by bringing to your industry the premium brands OEM and equipment to help you to achieve your business goals.
