Generation & Upstream
Industry challenges
As the energy industry is transitioning into a lower carbon future, power generation and oil and gas upstream activities follow suit:
- The eventual coal generation phase-out seems to be becoming an increasingly global consensus
- The Levelized Cost of Electricity (LCOE) of Renewables is already outperforming conventional generation – Therefore, we expect to see successive fuel switching, both from coal to natural gas and from natural gas to renewables
- The role of natural gas as a transition technology is openly questioned, so is the role of nuclear energy as a baseload substitute for coal
- Ongoing shale production efficiency gains put significant pressure on oil and gas pricing and have changed the upstream market. However, as OPEC seems to be willing to cut some production, we might see price spikes from at least temporarily tightening supply in the near future
