The Big Picture: 2024 Energy Transition Industry Outlook

2024 Outlook: Growing complexities for global energy transition

Energy transition efforts have ramped up over the past decade but have been tempered by macroeconomic and geopolitical challenges since 2022. Governments worldwide are, however, paying closer attention to the nuances of developing and using renewable energy technologies. Amid the complex business environment and an uncertain economic outlook, energy and mining companies face a plethora of challenges in 2024.

Policy developments in 2022 and 2023 related to the transition to renewable energy sources and associated critical minerals have yielded considerable near- and medium-term opportunities for the energy and mining sectors. But market participants will face significant headwinds in 2024 as interest rates remain elevated and economic growth slows.

The largest mining companies are prioritizing critical minerals, energy transition, climate strategy and the decarbonization of operations in future investment plans. Macroeconomic conditions through much of 2024 will likely deter some companies’ additional investment decisions as relatively weak metals prices disincentivize significant capital commitments. The medium-term outlook for the mining sector remains strong, particularly after the global economy finds solid footing and as energy security/transition efforts continue to gain pace.

Energy and utility companies are likewise facing near-term challenges to the rollout of both renewable and traditional energy infrastructure. Complex regulatory pathways have converged with persistent inflation to pressure the economics of various projects, particularly offshore wind. The industry is likely to take a cautious and rigorous approach to 2024 project development efforts, seeking to avoid the challenges many developers faced in 2022 and 2023. Existing policy incentives should allow the industry outlook for certain renewable energy investments to remain attractive over the next few years.