Recovering from covid-19 towards an uncertain future

Energy Perspectives is an independent report describing three possible paths for the world economy, international energy markets and energy-related greenhouse gas emissions. It illustrates how we must change the way we supply and use energy to achieve global climate goals. It contains different pathways for oil and gas demand. It illustrates how hydrogen can play a role in global energy markets. And much more.

“Energy Perspectives aims to address relevant topics and challenges that can inform discussions and build a greater understanding of what is needed to realise an energy transition and the decisions the world faces,” says Eirik Wærness, chief economist in Equinor.

“An energy transition is a matter of urgency. The discussions on our common energy future, where it might go, and where it should go, have never been more relevant, particularly during the Covid-19 crisis. Globally coordinated efforts from governments, as well as innovation from industries and changing behaviour from consumers are required to reach targets. Energy Perspectives 2021 is our contribution to a fact-based dialogue about this,” Wærness continues.

Total global energy demand is expected to peak at varying times in the three scenarios in the report; Rebalance, Reform and Rivalry. Increased electrification of the global energy system is a theme across all scenarios, which brings significant energy efficiency improvements. In Rebalance, total energy demand peaked already in 2019 due to immediate and coordinated tightening of climate policies, as well as behavioral changes on the back of the Covid-19 recovery, while Reform and Rivalry have peaks in 2040 and 2045, respectively.

New to this year’s report is an expanded discussion on hydrogen as an energy carrier, covering its potential uses and supply, and consequent impacts on the energy system. Hydrogen has been analysed through a sensitivity on the Rebalance scenario, illustrating how countries can further reduce their emissions towards net zero.

The challenge of delivering on the energy transition is massive. This is demonstrated by our Rebalance scenario, and even more so in the recently published IEA Net Zero Emissions scenario. If climate targets are to be met, unprecedented international cooperation will be required.

“Equinor has a robust strategy to face a long-term decline in oil and gas demand, and we are developing a portfolio that can also create value in a net zero future. Profitable oil and gas production are necessary to fund growth in renewables, CCS and hydrogen, all of which will be needed in a low carbon future. In this future there will be plenty of new business opportunities for us,” says Wærness.