The Top Investment Priorities for Industry Executives: Which Energy Sources Are They Betting On?
With the world’s population rapidly increasing and the effects of climate change more apparent each year, it’s becoming increasingly crucial for industry executives to focus on investing in sustainable energy alternatives to meet the world’s energy demands.
Baker Hughes Energy Transition Pulse 2023 conducted a survey asking 555 senior business leaders which energy sources they prioritize in their investments.
The results were fascinating, with some surprising insights that reveal the changing dynamics of the energy sector.
1. Solar Energy: The Future is Bright
The study conducted by Baker Hughes revealed that solar energy is the top priority for 43% of senior business leaders. Solar energy is a rapidly growing industry, with the cost of photovoltaic cells dropping significantly in recent years. The International Energy Agency (IEA) predicts that solar energy will be the primary source of electricity by 2050, with the potential to provide up to one third of the world’s electricity. Companies investing in solar energy now are positioning themselves at the forefront of the energy transition and have the potential to become leaders in this space.
“The energy transition is about economic prosperity, energy security – which is both reliability and affordability – and, of course, protecting the environment. Any time you over-index on any one of those, you may create an imbalance that can have unintended consequences.” – Mark Nelson, Executive Vice President of Strategy, Policy, and Development at Chevron ( Connect with Mr. Mark Nelson on LinkedIn )
2. Natural Gas/LNG: A Dependable Investment
Natural Gas/LNG came in second place, with 42% of industry executives prioritizing this energy source. As we transition to a low-carbon economy, natural gas has been touted as a “bridge” fuel because it emits less carbon than coal. Moreover, the abundance of natural gas reserves and the cost-effectiveness of natural gas extraction make it an attractive investment for many companies. Natural gas production contributes to energy security and has the potential to increase affordability for consumers.
3. Biomass/Waste-to-energy: A Sustainable Energy Solution
For 40% of senior business leaders surveyed, investing in biomass and waste-to-energy sources are top priorities. Using agricultural waste and organic materials to produce electricity, biomass energy is a viable alternative to traditional energy sources. By using waste products that would otherwise go to landfills, this energy source helps to reduce pollution and greenhouse gas emissions. Furthermore, biomass energy is sustainable and, as such, has the potential to reduce the world’s reliance on non-renewable energy sources.
4. Energy Storage: The Key to Unlocking Renewable Energy
Energy storage came in fourth place, with 35% of industry executives prioritizing this energy source. With the increasing reliance on renewable energy sources like solar and wind power, energy storage is critical in ensuring a consistent energy supply. It helps to mitigate the intermittent nature of renewable energy sources and increases grid stability. As such, investing in energy storage is crucial in ensuring the energy transition’s success.
5. The Energy Trilemma: Balancing Security, Sustainability, and Affordability
Finally, Baker Hughes’ study highlights how industry executives balance energy security, sustainability, and affordability. Companies need to invest in sustainable and affordable energy sources while ensuring that energy security is not compromised. To achieve this delicate balance, industry executives must prioritize investment in renewable energy sources while exploring low-carbon alternatives that maintain energy security and affordability.
“The big learning from this crisis is that we need to rethink the type and the way we use our energy. It’s painful in the short term, but it doesn’t change our climate initiatives.” – Ilham Kadri, CEO and President of the Executive Committee, Solvay. ( Connect with Ms. Ilham Kadri on LinkedIn )
The Baker Hughes Energy Transition Pulse 2023 study provides invaluable insights into the priorities of senior business leaders investing in energy sources.
“We have to balance the immediate need for energy with continuing the long-term path toward decarbonization. So how do we make sure that we protect the energy supply going forward? By having good differentiation and a full energy mix, including renewables, oil, gas, hydrogen, geothermal and many other available fuel sources, today.” – Lorenzo Simonelli, Chairman and CEO, Baker Hughes ( Connect with Mr. Lorenzo Simonelli on LinkedIn )
The study reveals that renewables like solar energy are central to the energy industry’s future, while low-carbon alternatives like natural gas/LNG remain dependable investment choices. Biomass and waste-to-energy sources are essential for attaining sustainability goals, and energy storage are crucial in ensuring a consistent supply of energy in an era increasingly reliant on renewable sources. Ultimately, companies investing in these energy sources will position themselves at the forefront of transitioning to a low-carbon economy while balancing the energy trilemma of affordability, sustainability, and security.
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