2023 Energy Transition Outlook
Survey Report
November 2022Table of Contents
Executive Summary 3
Industry Insights on Energy Transition 7
Policy and Regulation17
Green(er) and Clean Energy Solutions 26
The Path Ahead37
Methodology 38
Energy and Natural Resources Sector 41
Womble Bond Dickinson at a Glance 42
2023 ENERGY TRANSITION OUTLOOK SURVEY REPORT 2Executive Summary
In a year of sudden geopolitical shifts and associated market upheaval, energy Among the major takeaways:
sector executives and investors are adjusting their energy transition strategies
o At least 70% of both energy executives and investors have changed their
to respond to the rising pressure to access sufficient – and ideally lower-carbon transition strategies to some degree over the past year.
– energy in the short term, while moving to carbon-free renewable sources in
o Energy executives deepened their interest in three key areas that are
the long term. Accordingly, many industry leaders are deepening their focus on
vital to energy transition: 1) energy efficiency, 2) electrification in areas
decarbonization, “cleaner” technologies and fully renewable resources. However, like smart buildings, efficiency technologies, and transportation, and 3)
some in the sector are also dipping back into legacy fuel sources amid more options for the development and expanded use of biofuels/biomass.
recent supply and demand imbalances.
o While interest in hydrogen and geothermal investments remains strong,
These findings from the Womble Bond Dickinson (WBD) 2023 Energy Transition most investors expect it will take at least five or more years for green
Outlook Survey extend our Global Energy and Natural Resources Team’s ongoing hydrogen or geothermal to have a meaningful impact.
effort to provide insight into international progress toward a net-zero economy o Nuclear power has increased its appeal as an investment or growth
and the factors influencing the pace of the energy transition. This year’s results opportunity; however, many investors still worry about public opposition
provide a fresh perspective as to how executives and investors in the sector are to the technology, a concern some executives share.
navigating the challenges and seizing the opportunities amid unprecedented and o When it comes to ESG, nearly three-quarters of energy executives report
chaotic times.having implemented ESG policies or are in the process of doing so,
though it appears to be less of a priority for investors this year.
2023 ENERGY TRANSITION OUTLOOK SURVEY REPORT 3Skepticism around U.S. climate goals persists. Even though 42% of respondents said
the U.S. is “likely” or “very likely” to reach President Biden’s target of decarbonizing
the power sector by 2035 – up from 32% last year – nearly a quarter said that goal is
“very unlikely,” compared to 13% in 2021. At the same time, while executives are more
confident than they were a year ago that energy companies are prepared to reduce
GHG emissions, investor confidence on that front has slipped.
Societal expectations continue to be a critical driver for this global transformation. But
so is increased awareness of the energy security imperative. At this year’s Asia Pacific
Petroleum Conference, energy security was among the hottest topics, with energy
availability a key concern for governments the world over. The war in Ukraine has
disrupted energy supplies – most obviously in Europe – while driving considerable
demand shifts across the globe.
These factors have driven heightened interest in renewables and other clean power
sources as energy prices surge worldwide, with global oil and gas sector income
set to rise to $4 trillion this year, double the 2021 level and more than twice its five-
year average, according to the International Energy Agency. Indeed, market shifts
and new policies to address the global energy crisis triggered by Russia’s invasion of
Ukraine could expedite the clean energy transition away from fossil fuels, assuming
governments follow through on those policy goals, the IEA said in its 2022 World
Energy Outlook, released October 27. Many hope the transition to renewables will
help ease the strain on industries and consumers facing a sharp rise in energy costs.
2023 ENERGY TRANSITION OUTLOOK SURVEY REPORT 4To that end, oil and gas companies are investing profits in renewables projects as Our second annual survey results show that, despite rising challenges, the energy
part of a long-term strategy. In the medium term, the accelerating development of industry remains committed to shifting to more sustainable power sources while
decarbonization technologies demonstrates the recognition that fossil fuels will be looking to natural gas as the transition fuel of choice to help manage energy
part of our energy security equation for years to come. security concerns as it moves toward more sustainable power sources.
Here in the United States, sweeping domestic legislation such as the 2021
Infrastructure Investment and Jobs Act (IIJA) – which contained tens of billions of Key Findings
dollars committed to clean energy investments, including more than $62 billion for
o Energy leaders have responded to difficult market and geopolitical
Department of Energy (DOE) programs – gave a significant boost to renewable conditions by accelerating their adoption of generally cleaner fuel
energy development. Meanwhile, this year’s Inflation Reduction Act (IRA), the sources. Both executives and investors expect the industry to increase
most significant U.S. climate legislation ever passed, provides considerable energy supply, notably regardless of fuel source, to counteract current
follow-on incentives for the energy industry. The bill’s approximately $369 billion price inflation.
in funding provides considerable investment for clean energy production and o At least half of all respondents think the IIJA will move the needle on
the development of clean energy technology, support for transitioning utilities to areas including battery storage, hydrogen hubs and the transmission
clean electricity and increased tax credits for a broad array of renewable projects, grid. Considerably fewer think that nuclear power will benefit from the
legislation.
including those that embrace hydrogen and carbon capture technology.
o Respondents viewed vehicle pricing, lack of infrastructure and battery
Against this volatile backdrop, WBD again sought to capture attitudes and insights supply roughly equally when asked about hurdles to consumer electric
in the sector by surveying a cohort of 130-plus energy industry leaders, from vehicle (EV) adoption. Insufficient driving range and lack of compelling
investors to C-suite executives, across a range of energy subsectors, including incentives were less of a concern, likely because respondents find the
foundational technologies to be, at least in the near term, lacking.
oil and gas, renewables, utilities, mining and minerals, and nuclear energy.
Responses from “executives” comprise those with C-suite titles, business or o Utility executives are in broad agreement about the biggest challenges
facing the industry. Far and away, they cite fuel availability, supply chain
operations managers and in-house legal roles.
disruptions and regulatory compliance as their most pressing challenges.
2023 ENERGY TRANSITION OUTLOOK SURVEY REPORT 5