So, the oil price is low, now what? If the International Oil Companies are not spending as much money on new oil & gas projects, what are they investing in?
The “Energy Transition” is the new buzz word that is being thrown around by the International Oil Companies (IOCs). An energy transition is generally categorised as a long-term structural change in energy systems. The previous energy transitions were from wood to coal, from coal to oil, natural gas and nuclear and now from oil and gas to renewables.
As the investment in oil and gas projects declines, investment in alternative energy, including clean-tech is on the raise. In 2014, the Guardian reported that the global Clean-tech market experienced a 16% increase in investment to $310bn. So, what is Clean-tech (or Clean technology)? Wikipedia definition states that:
“Clean technology refers to any process or product, or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources, or environmental protection activities”
What will be the catalyst that will cause the Clean-tech revolution to advance? If we use history as an example of the future, the USA shale oil revolution was ignited due to the advances in technology that lead to the reduction in production costs.
The chart below shows that wind, solar and biomass are the cheapest technology to produce within the Clean-tech cartel. The costs of wind and solar energy have decreased dramatically over the last five years, while in certain markets clean-tech energy generation is cheaper than that of coal/natural gas. The World Economic Forum (WEF) reported that in more than 30 countries solar and wind is now the same price as or cheaper than new fossil fuel capacity.
In 2015, at the United Nations meeting held in Paris, 194 countries including the EU and China signed pledges on the environment, with the ultimate purpose to strengthen the global response to climate change by lowering emissions.
With the continuing decline in solar PV and wind energy production costs together with the political focus on climate change, clean-tech energy is here for the long haul. The chart below demonstrates growth investment in clean-tech, with Solar and wind leading the pack.
As global companies transition to become “nimble” and “flexible” in terms of their investment focus areas, engineers need to ensure their skills sets follow the same transition. The IOCs that historically considered themselves Oil & Gas companies are now re-branding themselves as Energy companies to hedge against continual low oil prices. Therefore, the historically “fossil fuel skilled” engineers also needs to ensure that their skills are robust in this new energy transition environment. As “energy engineers” they also need to ensure they have a diverse set of competencies to ensure survival.
ECP24 Ltd. is a network that engages with the world’s top engineers, to deliver top-tier engineering service to the industry. The clean-tech industry has four major elements to its value chain; equipment manufacture, project development, construction and installation and operations and maintenance. The skills required within these elements are transferrable from the fossil fuel industry.
Within the current dynamic energy industry, ECP24 provides the opportunity for an engineer to obtain experience in both oil & gas but also Clean-tech energy, ensuring that the skills are fit for the future. In this rapidly changing energy market, flexibility is king, both for the employer and the engineer.
For more info, sign up on: www.ecp24.online/professional-sign-up/
Author / Contributor: Taiwo Oyewole
Alan White CEO
ECP24 Ltd. – Engineering’s new home