Our energy system is reshaping at speed, but in different ways across different markets. Three accelerators can fast-track change. 

In brief

  • It’s time to rethink the energy transition — multiple energy transitions are unfolding around the world.
  • EY modeling suggests the pace of change is gathering speed, but focus across three areas will be needed to maintain momentum.
  • Energy and resources companies that make the right strategic choices at the right time can accelerate change and capture competitive advantage. 

Our energy system has transformed before, but not like this, and not this fast. A new EY report, If every energy transition is different, which course will accelerate yours? (pdf) and evidence from the EY Energy and Resources Transition Acceleration model reveal that the transition to renewables is happening at a much faster pace than anticipated. While the speed of change is still not enough to keep global warming to the 1.5 degree Celsius target, we believe that there is reason for optimism — if we can seize critical momentum and accelerate.

But doing so will require a rethinking of the energy transition. The world’s journey to a new energy future will not be linear or singular. Our modeling of global trends, technology breakthroughs and consumer engagement highlights the complexity and diversity of the changes ahead. There is not one energy transition, but multiple, unfolding at different paces and in different ways across the world.

Energy and Resources Transition Acceleration report

Conditions are ripe for the energy transition to accelerate. Discover the key strategic implications for your organization.

Multiple energy transitions will unfold around the world

When society shifts, or technology advances, the pattern of progress rarely follows a straight line. Instead, change follows an S-shaped curve, pushed forward by the positive impact of change itself. Technology improves and reaches economic tipping points as costs drop, capabilities increase, and consumers get on board. Electric vehicles (EVs) are a good example. A steep trajectory of adoption is outpacing predictions, with EV sales set to outstrip sales of all other vehicles by 2030.

Across the energy system, progress is becoming exponential, as technology matures and scales faster than anticipated. Innovation is beginning to decarbonize those hard-to-abate sectors once considered too difficult to transform, such as steelmaking. 


But while the pace of change is accelerating everywhere, it’s not uniform. Four levers are driving change to our energy system — technology advancement, commodity supply, consumer engagement, and government policy. Our modeling of these levers reveals that the energy transitions of different markets will vary widely, in speed and in nature.


Around the world, governments are making different trade-offs between economic priorities, geopolitical ambitions and environmental goals, based on the availability of resources (commodities, capital and capabilities). These trade-offs are driving policy decisions that send signals to the market and consumers and, ultimately, determine progress.


For example, some economies, including the UK, Europe and the US, have the policies, resources, capital and infrastructure to drive a faster transition. But in Asia and Africa, many governments are prioritizing economic growth and access to low-cost energy. Across the Middle East, oil still rules for now, but some nations, including Saudi Arabia, are pursuing ambitions to become global clean energy superpowers. And even within regions, or in a single country, the story can vary. China is leading the world in wind power — in late July, the world’s biggest wind turbine began operating off the coast of the Fujian province — but also still burns more coal than the rest of the world combined.


We’re entering the decade of disruption

As multiple energy transitions accelerate, we are entering a decade of disruption. A new energy system is already emerging, but our modeling reveals that post-2030 is when we’ll see the biggest changes. By then, solar- and wind-generated electricity will power almost everything (some industries, such as aviation and transoceanic shipping, will remain dependent on hydrocarbons, at least based on current technologies). Renewables will bring supply closer to demand, creating a highly localized energy system, with more opportunities for communities (and grid challenges for power and utilities companies). Oil and gas will still be part of the energy mix, but made much greener, through synthetic and alternative fuels. Consumers, both industrial and residential, will be the primary drivers of change as they adopt more energy technologies and become active orchestrators of a flexible, intelligent electricity grid. 

Energy demand
increase in global final energy demand by 2050

Together, the implications of change point to a more sustainable, resilient future where more people have access to cleaner, cheaper energy — but none of this is guaranteed. The reality is that while change is accelerating, it could easily stall due to the sheer complexity of the challenge ahead. What we’ve achieved so far in building out renewables has been relatively simple compared with what comes next. Decarbonizing a largely hydrocarbon-powered industrial sector is far more difficult, and our ability to tackle it will determine the ultimate success of the world’s transition to clean energy. Progress can be accelerated across three key areas, through innovative solutions that see energy and resources companies collaborate across a broader ecosystem of partners, including all of us. 


Accelerator 1

Incentivizing the switch from old to new energy

Targeted policy and technology innovation can achieve decarbonization targets faster.

Globally, green energy will dominate energy generation by 2038, and make up 62% of the power mix by 2050. A solar boom will power many markets, including in South Asia, Oceania and across the US, but in others, particularly Europe, the story will center around wind. Fossil fuel use will peak before the end of this decade, but a complete transition away from hydrocarbons will take longer, varying across markets, and it will be more expensive than anticipated. This is a challenge that we believe has been significantly underestimated. Even the most ambitious build-out of renewables won’t achieve decarbonization unless we simultaneously and aggressively accelerate the attrition of legacy energy assets.


This will require policy that pushes markets in the right direction, making hydrocarbon-generated energy more expensive more quickly, and improving the investor appeal of renewables. Current returns on clean energy are around 6%, compared with double that or more for upstream oil and gas. Intelligent carbon pricing, subsidies and incentives can turn this around and hasten the switch from old energy to new. Policies such as the US’s Inflation Reduction Act (IRA) and the EU’s Green Deal, and REPowerEU plan, are increasing the cost of emissions while also encouraging collaboration, and investment, in clean energy technologies. Within a year of the launch of the IRA, the US’s clean energy sector attracted eight years’ worth of investment, according to the World Economic Forum. Europe’s new target of at least 42.5% renewable energy by 2030 is expected to see 69GW of new solar and wind additions in 2023, a 17% increase on 2022. Global renewable capacity additions are set to jump to more than 440GW in 2023, its largest absolute increase.


With oil and gas as part of our energy mix for some time, incentivizing technology will also help “green the molecule.” We see significant opportunities on offer for oil and gas companies that take the lead here, developing, maturing and scaling a mix of solutions including carbon capture, usage and storage (CCUS), synthetic and bio-hydrocarbons, and alternative molecules such as hydrogen and ammonia. Progress could be accelerated through collaboration across the value chain. For example, Europe’s biggest CCUS project, Porthos, will see CO2 produced by Shell, ExxonMobil, Air Liquide and Air Products transported through the Rotterdam port to empty gas fields under the North Sea. Once operational in 2026, the project is forecast to reduce the Netherlands’ carbon emissions by 2% annually for 15 years, and also cut the Port of Rotterdam’s overall emissions by 10% every year.


With the right regulatory support, returns for green molecules could outpace those for gray by the early 2040s, according to our forecasts. The challenge for oil and gas companies will be balancing a need to invest in new technologies while keeping core assets operating for longer. Every company will need to identify and commit to its own strategic choices. The EY report outlines some no-regret actions oil and gas companies can take.

Oil and gas portfolio evolution (illustrative)

Source: EY analysis of ERTA model data and O&G majors strategies.


Accelerator 2

A stronger supply chain can speed up progress

Closing the supply gap of critical metals and minerals can accelerate new energy build-out.

The energy transition simply won’t happen without mining. Building new energy assets and infrastructure will require massive amounts of minerals and metals, particularly copper, lithium, nickel and iron ore. But a huge shortfall is looming, due to growing constraints around getting commodities from mine to market. Resource nationalism and geopolitical tensions threaten to disrupt supply, push up costs and increase market volatility. China dominates processing of all critical minerals. Insufficient capital is also a challenge. Investment in mining exploration and development is forecast to reach around US$200b by 2030, which is about half of what we believe will be required. 

Rising commodity demand, 2022–2050

Note: Lithium is in Li metal
Source: S&P Global; Argus; IEA (NZE); Credit Suisse; European Aluminium; Morgan Stanley; EU Joint Resource Centre

Miners will need a huge influx of capital, new talent with different skills, and a more nuanced, sophisticated approach to building relationships with governments and communities. But it all starts with trust — and this is where the opportunity lies. Mining’s role in our clean energy system has been consistently undervalued. Mining companies that focus on targeted environmental, social and governance (ESG) initiatives can demonstrate their value to communities, governments and investors, winning capital, talent, faster project approvals, and license to operate. Demand from customers for more sustainable supply chains is already reaping rewards for mining companies that have invested in decarbonizing operations, as well as solutions, such as blockchain, that track and trace emissions from mine to market and beyond.

A stronger supply chain also requires a more strategic approach to portfolio planning. Considering a range of possible alternative futures can help miners cater to future demand, reducing the risk of investment. But this is not a problem that mining companies can solve alone. Some miners are collaborating with universities and tech companies to develop technology that can extract minerals from waste. Rio Tinto and partners are using bacteria to leach copper from waste rock in North American mines at far lower concentrations than is usually viable. Others are partnering with automakers and battery manufacturers to shore up supply, reduce risk and costs, and tap into government incentives. Every mining and metals company will need to decide its own path based on its market and commodities, but the EY report suggests some no-regret actions to take now.


Accelerator 3

Meeting consumer expectations can boost confidence

Reinventing the consumer relationship can encourage adoption of new energy solutions and build a flexible grid.

In every market, energy transitions will only succeed if consumers — residential and industrial — take the lead. But we can’t expect people and businesses to switch because of sustainability motivations alone. Clean energy must be cheaper and genuinely better.


This creates opportunities for power and utilities companies to consider how offering more value to consumers can accelerate their own growth and advance decarbonization. But they’ll have to rip up the old rulebooks about consumer engagement. In a highly localized, mostly electrified energy ecosystem, consumers will produce, use and trade energy differently. Industrial customers no longer want to simply buy power from energy companies, but partner with them. Consider Belgium’s Port of Antwerp-Bruges where a mix of energy companies, industrial players and public stakeholders have built a shared hub for the importation, production and throughput of green hydrogen. Australia has plans to emulate the project, developing its own hydrogen hub in South Australia’s Port Bonython, where energy companies will partner with a range of public and private sector organizations. Collaborations such as these can help energy companies nail their value proposition for industrial consumers which, by 2050, will make up more than half (55%) of total electricity demand, according to our modeling.


Residential consumers are also more engaged in the energy experience, and this will only increase as new energy solutions such as EVs and heat pumps become mainstream. EY research reveals that while consumers in different markets have different priorities, all have higher expectations around personalized, convenient energy options that align with their values. Power and utilities companies that put consumers at the heart of the business can identify these motivations and develop compelling products and services in collaboration with companies from adjacent sectors.

Understanding what drives different consumer groups can also help shift behavior, which is an overlooked but critically important part of creating a more flexible electricity grid. Investment in new technology will only get us so far. Our ability to balance a localized grid and avoid outages will depend on incentivizing consumers to shift demand and boost supply to flatten peaks.

The impact of multiple energy transitions will perhaps hit power and utilities companies harder than any other sector. Different companies will need to develop markedly different strategies, with success contingent on making the right choices at the right time. The EY report outlines some no-regret actions to help power and utilities companies find their own path.

Action now can maintain momentum

Progress toward a new energy system is picking up speed, but maintaining momentum will require us to think differently. Multiple energy transitions are unfolding in different ways around the world, and while this means complexity is a given, it shouldn’t delay action. The risk of standing still far outweighs that of moving forward. Action now around three areas, led by energy and resources companies, but in collaboration with government, other sectors and all of us, can accelerate the journey to create a cleaner, more resilient and sustainable energy system.


Multiple energy transitions are reshaping global energy systems, but at varying speeds and in different ways. EY modeling predicts change will accelerate over the next decade and beyond, but only if organizations seize momentum now. Energy and resources companies can take the lead in progressing transformation through action across three areas: incentivizing the switch from legacy assets to renewables; building a minerals and metals supply chain to keep up with demand; and empowering consumers to play a bigger part. Organizations that commit to the right actions now can quicken the journey to a decarbonized future and realize significant commercial opportunities. 

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