Fuelling the future

Jon Clark EMEIA leader oil & gas transaction advisory services, Ernst & Young

But, said Jon Clark EMEIA leader oil & gas transaction advisory services, Ernst & Young, the world is in the throes of an energy transition which means different things to different people which can be defined by six Ds.

1. Decarbonisation
2. Division of power
3. Developing markets
4. Decentralisation
5. Digitalisation
6. Design for efficiency

“The energy ecosystem will not be transformed quickly or cheaply. There are big questions about the path to clean energy. We’ve developed models for different versions of the future,” he told delegates at Africa Oil Week.

1. The long good bye where we continue as is with a gradual transition
2. Slow peak where transition is predicted for the late 2040s
3. Meet me in Paris, which is the best possible scenario with governments working towards meeting the global climate change objectives on carbon emissions and banning single use plastic
4. Faster shift which is fuelled by gas and where nuclear could make a comeback

“The fastest way to move to carbon-free is to take coal out of the equation,” Clark said.

There are, however, other influences that will impact which scenario plays out.

Electric vehicles

The model that emerges is largely dependent on the electrification of vehicles. While governments in the developed world wanting every vehicle on the road to be electric by the 2030s, this is not a realistic assumption in the developing world, he said.

Income elasticity

How the emerging middle class in developing economies spends their money impacts the demand on energy. Income elasticity means that this demographic is likely to spend their extra money on cars and travel, Clark said.