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Energy sector professionals have positive outlook for coming year: DNV

Source: DNV

The latest Industry Insight survey from DNV finds that 73% of senior energy professionals are confidence in the industry’s growth trajectory for the coming year, similar to the 2022 figure of 72%, with the oil and gas sector seeing a resurgence in confidence

However, sentiment varies from sector to sector, with the electric power and renewables sectors in particular recording notable declines from previous peaks.

Optimism in the electrical power sector has dipped from 87% to 76%, while renewables have experienced a similar downward trend, from 87% to 78%. Rising costs and supply chain disruptions pose significant hurdles to project viability and the pace of energy transition. The electric power industry faces a pronounced shortage of skilled talent, hindering progress in energy transition and digital initiatives. Regulatory hurdles and intensifying market competition also pose challenges for renewables.

There has also been a fall in optimism about organisational decarbonisation targets among survey respondents, with the majority (62%) believing that financial costs are the greatest barrier to reaching the goals of the Paris Agreement.

Optimism rises in oil and gas sector

However optimism has risen in the oil and gas sector, from 58% in 2022 to 68% in 2024, reflecting the industry's pivotal role in meeting global energy demand while navigating the transition to cleaner fuels. Established oil and gas companies have also benefited from branching out into decarbonisation and renewable energy.

Global political uncertainty is seen as the primary threat to success over the coming year, particularly the 2024 wave of elections and potential policy shifts. Given its importance to the global energy sector, the outcome of the upcoming elections in the USA holds particularly significant implications for energy industry sentiment and strategic planning.

"The transition towards a sustainable energy future is not just desirable; it's imperative,” said Ditlev Engel, CEO Energy Systems at DNV. “Key drivers of optimism include the relentless march toward decarbonisation and electrification, offering long-term clarity amid near term uncertainty. Understanding this shift as a necessary progression aligns with the industry commitments under the Paris Agreement, reinforcing its determination to drive meaningful change. Consequently, the industry's optimism about the path ahead is well-founded – especially since the requisite technologies are already within our reach.

“For decades, the energy sector has faced enduring political risks, evolving from localized tensions to global challenges affecting every aspect of the industry,” added Engel. “Amidst fluctuating prices, disruptions in supply chains, wavering investor confidence, and shifting regulations, stakeholders stress the importance of maintaining a long-term perspective, anchored in stable supply contracts. In this climate of uncertainty, the sector must demonstrate resilience, adaptability, and a strategic vision for the future to overcome policy ambiguities and foster economic growth, job creation, and prosperity for all. Furthermore, to effectively scale the energy transition across various industries, it's imperative to streamline and standardise processes. A key challenge is to secure lasting regulatory support and clear visibility into the future to rapidly deploy existing technologies.”