Global Energy Transition Driving Change and Demand
The energy transition from fossil-based fuels to lower carbon alternatives is underway. While it is a threat for the fossil fuel based energy sector, it is also driving significant new opportunities, including demand for reliable and cost effective energy storage and, with it, demand for different types of minerals, such as lithium, cobalt and alternative battery materials.
The primary drivers of the global energy transition are, firstly, the emergence of renewables (such as solar and wind power) as alternatives to traditional fossil fuels and, secondly, the growth of battery storage, including for electric vehicles, decentralised energy systems and large-scale battery storage. One of the main challenges that companies across the traditional energy sector - and countries that are beneficiaries of plentiful fossil fuel resources - currently face is how to prepare for the change and where to commit capital in the ‘new energy’ world.
Sources of renewable energy, such as wind and solar power, have grown at an unprecedented rate in the last decade, a trend which is expected to continue as costs continue to decline. This ongoing transition, underpinned by the growing electrification of the world’s energy needs, will have major social, economic and political implications which go well beyond the energy sector.