Oliver Wyman believes renewable sources of energy will be the dominate suppliers by the year 2050. The international management consulting firm makes this statement in the days before its annual Energy Journal.
The company recognizes the changing tide of the energy marketplace, the disparity between the Eastern and Western worlds as it pertains to technology, and the future of the fossil fuel industry in its synapsis. Oliver Wyman has laid out four mega-trends it believes will continue into the middle of the 21st century:
- Energy produced by coal and nuclear generation will no longer be relevant in OECD (Organization for Economic Co-operation and Development) countries by 2050. The company points out that while coal in the short run may be replaced by natural gas, this is only a middle step to the inevitability of green energy. As the scale of renewables continues to increase, the cost will continue to decrease until it is the only viable economic option. This will be the final blow to these industries.
- Renewable energy will be highly decentralized and democratized by the year 2040. Oliver Wyman points out that consumers and producers will cease to exist as entirely separate entities, with a massive increase in so called “prosumers”. People increasingly generate their own electricity and contribute what they can not use to the grid. Traditional power plants will have taken a back seat to this new era of generation.
- New technology will increasingly be developed in Asia and partially the United States. China has already taken the lead in its pursuit of solar, wind, and infrastructural advances and this trend will only continue.
- Oil and gas companies will take a vastly different shape, with only four highly specialized varieties remaining. These include low cost high volume suppliers, unconventional and low risk producers, full service energy companies, and finance backed companies.