Plans submitted by most signatories of the Paris Agreement would reduce global greenhouse gas (GHG) emissions, but the UN has warned that they are still not ambitious enough to limit global temperature rise to 1.50C by the end of the century. Governments, consumers and investors alike realize that more must be done and are putting pressure on companies to take steps now to move to a greener economy. Company responses include the exploration of innovative technologies to help reduce emissions. This is providing opportunities for traditional energy companies to capitalize on these developments and change their operating models to create longer-term competitive advantage.
Members of the strategic planning team at this mid-sized oil and gas company were charged with defining a path forward for the company that would outline where it could reduce its emissions and how it should compete as the world transitions to a low-carbon future. Team members needed to better understand the array of clean energy technologies available to take full advantage of the opportunities to support their emissions reduction target strategy and to consider potential new prospects in the clean energy space.
They were interested in learning more about battery storage, hydrogen, renewable gas, solar PV, offshore and onshore wind and carbon sequestration.
Pain Points
According to the International Energy Agency, oil and gas companies are facing a critical challenge as the world increasingly shifts towards clean energy transitions.1 Fossil fuels drive the companies’ near-term returns, but failure to address growing calls to reduce GHG emissions could threaten their long-term social acceptability and profitability. Members of the strategic planning team at this mid-sized company were lagging their peers at larger organizations in devising plans to help combat climate change. They needed a starting point to quickly understand:
- The clean technology landscape and array of available solutions.
- How to make the company's core businesses more resilient.
- If expansion into low-carbon opportunities was feasible.
- Changes needed to the company's operating model to flourish in a low-carbon world.
- The costs associated with any change.
- The competitive environment looking forward.
The head of the strategic planning team had heard that IHS Markit had become part of S&P Global in the first quarter of 2022, and that S&P Global Platts and IHS Markit Energy & Natural Resources had combined to become S&P Global Commodity Insights ("Commodity Insights"). He reached out to Commodity Insights to learn more about the information being provided to oil and gas companies to help them with their energy transitions.
All major sectors are under pressure to decarbonize. This oil and gas company needed to understand how clean energy technologies will develop and the opportunities they may present to craft an appropriate path forward.
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The Solution
Specialists from Commodity Insights presented the Global Clean Energy Technology service that helps decision-makers and business developers define their future activities. The solution provides comprehensive data, analytics and insights on the important technologies shaping the transformation of the energy industry. This includes in-depth coverage of the supply chain, economics and outlooks for: batteries and energy storage, hydrogen and renewable gas, solar PV, onshore wind, offshore wind and carbon sequestration. In addition, it provides light coverage of other clean technologies, such as geothermal, concentrating solar-thermal power (CSP) and small modular reactors (SMR). This extensive information would enable the strategic planning team to:
Costs and Technology:
Understand what clean technologies are available, how they are evolving and their cost
The Global Clean Energy Technology service provides robust and detailed information on the status of these technologies, how they are evolving and the next generation technologies, as well as recycling options and potential markets. The service also provides detailed information on the associated costs for component pricing and equipment.
Assess the complementarity and competitiveness between technologies
A deep level of analysis of the overall clean technology landscape looks at the interactions of technologies and how they may compete or complement one another. For example, global green hydrogen ambitions drive $418 billion in wind and solar PV investment by 2030. The analysis looks at the combination of batteries with intermittent renewables (in particular, solar) as an important technology option for powering green hydrogen production facilities. The service also provides information on carbon capture and storage (CCUS) with detailed analysis complementing that for blue hydrogen, which is produced from fossil fuels with CCUS.
Policy and Revenue Streams:
Evaluate the implications of new policies
Users can track changes and announcements of new policies on a global basis and across technologies to identify opportunities and impacts on stakeholders’ revenue streams.
For example, the Inflation Reduction Act passed in the U.S. in 2022 unlocks $370 billion in climate and energy investment. This has been a historical win for clean energy technologies with a significant improvement of economic conditions for emerging technologies like carbon capture, utilization and storage and hydrogen.
Companies and Supply Chains:
Track market players and their activities
The service provides an extensive project database with over 130,000 projects, including details on technology providers, system integrators, developers, engineering and procurement and construction firms, up to the owner of the projects. For example, clients can conduct a quick screening of clean technology projects by countries to understand where the most activity is taking place and potential, or by companies to understand evolving asset portfolios.
Capacity and Investment Outlook:
Understand demand, capacity and investment outlooks
The Global Clean Energy Technology service provides detailed analysis of the supply chains and future outlooks. For example, in the solar PV sector, the service provides a detailed view on the evolution of PV installations, the module and inverter supply chain, the suppliers and the equipment spending.
Similarly in the Battery sector, the service provides detailed analysis and forecasts for the buildout of battery cell manufacturing capacity, including a global database of battery cell factories. Market Tracker provides historical data and forecasts for battery demand by sector and technology, capacity and production for battery cells, along with price and cost analysis.
Coupled with Easy Access and Support:
Easily access, view and compare information
The Clean Energy Technology service is delivered via Connect, a research portal. Adding to this, Clean Energy Technology Analytics (CETA) is a premium interactive data visualization capability that facilitates workflows for users interested in comparing data across technologies using an integrated dashboard.
A number of datasets are also accessible via an API option.
In addition, regular strategic reports, webinars and workshops address industry developments and hot topics.
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The support of our wide-ranging team of specialists is unparalleled, backed by deep knowledge and expertise in data, analytics and global clean technology markets.
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Key Benefits
Many uncertainties underlie the future path of the energy system. Members of the strategic planning team thought that the Clean Energy Technology service would provide the continuous cycle of data and analytics-driven research needed to stay on top of this rapidly evolving area to help define appropriate company activities and investments. They subscribed to the service and now are benefiting from having:
- Access to a comprehensive and granular database of clean energy technologies along with forecasts to support an analysis of company portfolios, project pipelines and technology trends.
- Clean energy technology project tracking, including project ownership and equipment supply.
- Detailed price and market fundamental forecasts for key components of the equipment for the technologies covered, providing insight into the supply/demand balance, and the future impact this has on pricing.
- Information on capital expenditures and levelized costs of energy to assess the cost side of the equation.
- The ability to understand supply chain developments, market dynamics and the impact of policy and regulatory changes to help anticipate market turning points.
- Online tools to conduct a quick screening of clean technology projects by country to see where there is the most activity and potential, or by company to understand evolving portfolios.
- The ability to save time on analysis, interpret data easier and efficiently evaluate the clean energy technology landscape all in one view with a premium, interactive dashboard.
Click here for more information on the Clean Energy Technology service.
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1Oil and gas industry needs to step up climate efforts now", International Energy Agency, January 2020, www.iea.org/news/oil-and-gas-industry-needs-to-step-up-climate-efforts-now.