Powering the Future: Strategic Analysis of Global Energy Leaders
Industry Overview
Technological advancements, policy adjustments, and global economic conditions are anticipated to drive the energy and power sector's continued evolution in 2024, following the significant developments that occurred in 2023. The International Energy Agency (IEA) reports that global energy demand increased by approximately 2.4% in 2023, which is indicative of economic development and a recovery from the COVID-19 pandemic. Wind and solar power have contributed to more than 70% of the new capacity additions, making renewable energy sources a critical component of this expansion.
Renewable energy generated approximately 29% of the world's electricity in 2023, a rise from 27% in 2022. The global installation of solar power reached a record high of 270 gigawatts (GW), a 24% increase from the previous year. Wind power also experienced substantial growth, contributing 110 GW to the global grid. It is anticipated that the current increase in renewable energy capacity will persist in 2024, with projections suggesting a 15% increase in solar installations and a 12% increase in wind capacity. The adoption of electric vehicles (EVs) has also resulted in a significant transition in electricity consumption patterns. Sales of electric vehicles (EVs) exceeded 10 million units in 2023, a 35% increase from 2022, according to the International Energy Agency. Supportive government policies and advancements in battery technology are expected to fuel the sale of an estimated 15 million electric vehicles (EVs) in 2024, as this trend is expected to persist.
Substantial investments in energy storage and grid infrastructure have also characterized the energy transition. Global investment in energy storage systems surpassed $20 billion in 2023, representing a 30% increase from 2022. This investment is essential for the maintenance of grid stability and the mitigation of the intermittent character of renewable energy sources. The trend is expected to persist in 2024, with an anticipated investment of more than $25 billion in energy storage. Several countries have established ambitious targets to attain net-zero emissions on the policy front. For example, the European Union intends to reduce greenhouse gas emissions by 55% by 2030 in comparison to 1990 levels, while the United States has pledged to achieve a 50-52% reduction by 2030. The adoption of healthier energy technologies and the phase-out of coal and other fossil fuels are being driven by these policy commitments. The consumption of coal is anticipated to decrease by 5% in 2024, following a 3% decline in 2023.
Details for top 10 countries
United States
The United States remains a dominant force in the global energy and power sector, with a total energy consumption of approximately 98 quadrillion British thermal units (BTUs) in 2023, and it is anticipated to reach 100 quadrillion BTUs in 2024. The industrial sector is the largest energy consumer, contributing 32% of the total energy consumption. Transportation (28%), residential (22%), and commercial (18%) are the next greatest energy consumers. Approximately 15% of the global energy market is occupied by the United States. Renewable energy sources, such as hydroelectric, solar, and wind power, accounted for 21% of the nation's electricity generation in 2023. It is anticipated that considerable investments will drive this figure to 23% in 2024. In 2023, solar power installations increased by 30 gigawatts (GW), while wind power increased by 14 GW. Additionally, the United States experienced a substantial increase in the adoption of electric vehicles (EVs), with more than 1.5 million EVs sold in 2023 and an anticipated increase to 2 million in 2024. In 2023, energy storage investments amounted to $7 billion, which facilitated the integration of renewable energy sources and the stability of the grid.
China
China is the world's largest energy consumer, with a total energy consumption of 150 quadrillion BTUs in 2023. This figure is anticipated to increase to 155 quadrillion BTUs in 2024. The industrial sector is the largest consumer of energy, accounting for nearly 60% of the total. Residential (20%), transportation (12%), and commercial (8%) follow in that order. Approximately 25% of the global energy market is controlled by China. In 2023, solar and wind capacity increased to 400 GW and 350 GW, respectively, thanks to the significant contribution of renewable energy sources. In 2024, it is anticipated that these figures will rise to 450 GW and 380 GW, respectively. China's electric vehicle market is also experiencing significant growth, with an estimated 6 million EVs sold in 2023 and an anticipated 8 million in 2024. In 2023, investments in energy storage technologies surpassed $10 billion, with an emphasis on the integration of renewable energy sources and the improvement of grid reliability.
India
In 2023, India's energy consumption was approximately 40 quadrillion BTUs, with an anticipated increase to 42 quadrillion BTUs in 2024. The industrial sector is the largest consumer, comprising 45% of the total energy consumption. Residential (30%), transportation (15%), and commercial (10%) comprise the remaining sectors. Globally, India accounts for approximately 6% of the energy sector. In 2023, renewable energy sources accounted for 20% of electricity generation. This figure is anticipated to increase to 22% in 2024, with solar power installations contributing 20 GW in 2023 and an additional 25 GW in 2024. In 2023, the amount of wind power increased by 5 GW. In 2023, 1 million electric vehicles (EVs) were sold in India, and it is anticipated that this figure will increase to 1.5 million by 2024. In 2023, energy storage investments amounted to $3 billion, which facilitated the integration of renewable energy and the stability of the grid.
Germany
The energy consumption of Germany in 2023 was approximately 13 quadrillion BTUs, with a minor increase to 13.5 quadrillion BTUs anticipated in 2024. The industrial sector is the greatest consumer, comprising 40% of the total energy consumption. Residential (25%), transportation (20%), and commercial (15%) are the next largest consumers. Approximately 2% of the global energy market is occupied by Germany. Wind and solar power made substantial contributions to the 45% of electricity generation that renewable energy sources accounted for in 2023, which is expected to increase to 47% in 2024. Wind capacity was 65 GW, and solar capacity was 70 GW in 2023, with projections of 75 GW and 68 GW, respectively, in 2024. The electric vehicle market in Germany is expanding, with 500,000 EVs sold in 2023 and an anticipated 700,000 in 2024. In 2023, investments in energy storage totaled $4 billion, with an emphasis on the integration of renewable energy sources and the stability of the grid.
Japan
In 2023, Japan's energy consumption was approximately 19 quadrillion BTUs, and it is anticipated that this figure will marginally increase to 19.5 quadrillion BTUs in 2024. The industrial sector is the largest consumer, contributing 35% of the total energy consumption. Residential (30%), transportation (20%), and commercial (15%) are the next largest consumers. Approximately 3% of the global energy market is controlled by Japan. In 2023, renewable energy sources accounted for 24% of electricity generation, a figure that is expected to increase to 26% in 2024. This growth is expected to be driven by substantial investments in solar and wind power. In 2023, solar capacity amounted to 80 GW, while wind capacity was 10 GW. Predictions indicate that these figures will increase to 85 GW and 12 GW, respectively, in 2024. The electric vehicle market in Japan is experiencing growth, with a projected 500,000 EVs sold in 2024 and 300,000 EVs sold in 2023. In 2023, grid stability and renewable energy integration were bolstered by $2.5 billion in energy storage investments.
Russia
In 2023, Russia's energy consumption was approximately 31 quadrillion BTUs, and it is anticipated that this figure will slightly increase to 32 quadrillion BTUs in 2024. The industrial sector is the greatest consumer, comprising 50% of the total energy consumption. Residential (25%), transportation (15%), and commercial (10%) are the next largest consumers. Approximately 5% of the global energy market is occupied by Russia. In 2023, renewable energy sources accounted for only 5% of electricity generation in Russia, while fossil fuels, particularly natural gas and oil, dominated the country's energy composition. This is anticipated to increase to 6% in 2024 as a result of modest investments in hydro and wind power. The electric vehicle market in Russia is relatively modest, with 50,000 EVs sold in 2023 and an anticipated 80,000 in 2024. Energy storage investments are currently restricted; however, they are increasing, with a projected $1 billion in 2023.
Brazil
Brazil's energy consumption was approximately 11 quadrillion BTUs in 2023 and is anticipated to rise to 11.5 quadrillion BTUs in 2024. The industrial sector is the largest consumer, contributing 35% of the total energy consumption. Residential (30%), transportation (20%), and commercial (15%) are the next largest consumers. Brazil occupies approximately two percent of the global energy market. In 2023, renewable energy sources, notably hydroelectric power, dominated the energy mix, accounting for 65% of electricity generation. This figure is expected to rise to 66% in 2024. Solar and wind power also experienced development in 2023, with solar capacity reaching 20 GW and wind capacity at 15 GW. Brazil's electric vehicle market is rapidly expanding, with an anticipated 300,000 EVs sold in 2024, in addition to the 200,000 EVs sold in 2023. In 2023, investments in energy storage totaled $1.5 billion, with an emphasis on the integration of renewable energy sources.
Canada
In 2023, Canada's energy consumption was approximately 13 quadrillion BTUs, and it is anticipated that this figure will slightly increase to 13.5 quadrillion BTUs in 2024. The industrial sector is the greatest consumer, comprising 40% of the total energy consumption. Residential (25%), transportation (20%), and commercial (15%) are the next largest consumers. Approximately 2% of the global energy industry is occupied by Canada. In 2023, renewable energy sources were responsible for 20% of electricity generation, a figure that is expected to increase to 22% in 2024. Hydro, wind, and solar power all made substantial contributions. 2023 saw a solar capacity of 10 GW and a wind capacity of 15 GW, with projections of 12 GW and 17 GW, respectively, in 2024. The electric vehicle market in Canada is expanding, with a projected 200,000 EVs sold in 2024 and 150,000 EVs sold in 2023. In 2023, $2 billion was allocated to energy storage investments, with an emphasis on the integration of renewable energy sources and the stability of the grid.
France
In 2023, France's energy consumption was approximately ten quadrillion BTUs, and it is anticipated that this figure will rise to 10.5 quadrillion BTUs in 2024. The industrial sector is the largest consumer, contributing 35% of the total energy consumption. Residential (30%), transportation (20%), and commercial (15%) are the next largest consumers. Approximately 2% of the global energy market is controlled by France. France's energy balance is dominated by nuclear energy, which accounted for 70% of electricity generation in 2023. This level is expected to be sustained in 2024. The capacity of renewable energy sources, notably solar and wind, is also increasing, with solar capacity reaching 15 GW and wind capacity at 18 GW in 2023. The electric vehicle market in France is experiencing growth, with 400,000 EVs sold in 2023 and an anticipated 600,000 in 2024. Grid stability and renewable energy integration were facilitated by $3 billion in energy storage investments in 2023.
United Kingdom
In 2023, the United Kingdom's energy consumption was approximately eight quadrillion BTUs, and it is anticipated that this figure will slightly increase to 8.5 quadrillion BTUs in 2024. The industrial sector is the greatest consumer, comprising 30% of the total energy consumption. Residential (30%), transportation (25%), and commercial (15%) are the next largest consumers. Approximately 1.5% of the global energy market is occupied by the United Kingdom. In 2023, renewable energy sources were responsible for 40% of electricity generation, a figure that is expected to increase to 42% in 2024. Wind and solar power were the primary sources of renewable energy. Wind capacity was 25 GW, and solar capacity was 13 GW in 2023, with projections of 15 GW and 27 GW, respectively, in 2024. The electric vehicle market in the United Kingdom is expanding, with an estimated 400,000 EVs sold in 2023 and a projected 550,000 in 2024. In 2023, investments in energy storage totaled $2.5 billion, with an emphasis on the integration of renewable energy sources and the stability of the grid.
PESTEL Analysis
Political
Political factors, including government policies, regulations, and international agreements, significantly impact the market dynamics of the energy and power sector. Stringent regulations and ambitious targets for renewable energy adoption are the result of the growing emphasis of governments worldwide on sustainability and climate change mitigation. For instance, the Paris Agreement has motivated numerous nations to pledge to achieve net-zero emissions by mid-century, thereby influencing national energy policies and regulatory frameworks. Another critical factor is political stability, which influences the continuity of long-term energy initiatives and the confidence of investors. Investments in renewable energy and infrastructure development are more likely to be attracted to countries with stable political environments, such as those in Western Europe. In contrast, regions that experience frequent policy changes or political instability may encounter difficulties in securing consistent investments. The sector is substantially influenced by the subsidies and incentives that governments provide. For instance, subsidies for fossil fuels can impede the transition to healthier energy sources, whereas renewable energy incentives, such as tax credits and feed-in tariffs, can expedite their adoption. Investment Tax Credit (ITC) for solar power has been a critical factor in the expansion of the solar industry in the United States.
Economical
Economic factors significantly influence the dynamics and development of the energy and power sector. Energy demand is directly influenced by economic development and industrialization, as developing economies experience rapid increases in energy consumption as a result of urbanization and the expansion of industrial activities. For example, the demand for energy has increased significantly in countries such as China and India in conjunction with their economic expansion. The sector is significantly influenced by energy prices, which include oil, gas, coal, and electricity. The viability and competitiveness of various energy sources can be affected by price fluctuations. High oil prices, for instance, can expedite the transition to renewable energy by rendering alternatives such as solar and wind more economically viable. In contrast, the transition to renewable energy sources may be impeded by the absence of subsidies, as low fossil fuel prices render them less competitive. Another critical economic factor is the energy sector's investment tendencies. In 2023, the global investment in renewable energy exceeded $300 billion, suggesting that investors are confident in the sector's growth potential. Technological advancements, government incentives, and the decreasing cost of renewable energy technologies are among the factors that motivate investments. For instance, the cost of solar photovoltaic (PV) systems has decreased by over 80% in the past decade, rendering them more economically viable.
Social
The energy and power sector is significantly influenced by social factors, as public attitudes, cultural values, and social behaviors influence energy consumption patterns and create demand for sustainable solutions. Greater public awareness and concern regarding environmental sustainability and climate change have resulted in increased support for energy efficiency and renewable energy initiatives. The adoption of renewable energy technologies, such as electric vehicles (EVs) or rooftop solar panels, is on the rise as consumers become more aware of their carbon footprint. The success of energy initiatives is contingent upon their social acceptability. The development of large-scale energy projects, such as nuclear facilities or wind farms, may be delayed or halted by community opposition due to concerns regarding safety, noise, visual impact, and environmental factors. It is imperative to engage with local communities and resolve their concerns through transparent communication and benefit-sharing strategies in order to obtain a social license to operate. Energy access and equity are also significant social factors. The quality of life and economic development are impeded in numerous developing regions by the lack of access to reliable and affordable energy. Social outcomes can be substantially enhanced by initiatives that prioritize energy access, particularly through decentralized renewable energy systems. For example, solar residential systems and mini-grids are supplying electricity to millions of individuals in rural Africa and Asia, thereby improving educational opportunities, healthcare, and economic activities.
Technological
?The energy and power sector is significantly influenced by technological factors, which promote the adoption of new energy sources, efficiency, and innovation. Renewable energy has become more competitive with traditional fossil fuels as a result of the significant reduction in costs and increase in efficacy of technologies such as solar photovoltaics (PV), wind turbines, and battery storage. Another environmental concern in the energy sector is waste management. In order to prevent environmental contamination, the disposal of hazardous refuse from fossil fuel plants, nuclear waste from nuclear power plants, and electronic waste from renewable energy technologies necessitates meticulous handling. It is imperative to establish robust waste management systems and develop efficient recycling processes in order to mitigate these effects. The energy sector's environmental footprint can be significantly reduced through the implementation of energy efficiency measures. Energy consumption and associated emissions can be substantially diminished by optimizing energy utilization in industrial, residential, and commercial sectors. Energy-efficient appliances, structures, and industrial processes are among the environmental innovations that contribute to a reduction in the overall impact.
Environmental
The energy and power sector is a significant contributor to environmental issues and a key player in efforts to mitigate them, which is why environmental factors are fundamental to the industry. The energy sector is accountable for approximately 75% of global greenhouse gas emissions, making climate change the most urgent environmental issue. In order to mitigate these emissions and restrict global warming to 1.5 degrees Celsius above pre-industrial levels, as stipulated in the Paris Agreement, it is imperative to transition to low-carbon and renewable energy sources. In comparison to fossil fuels, renewable energy sources, including hydro, solar, and wind, have a significantly reduced environmental impact. They contribute to the mitigation of climate change and the reduction of air pollution by emitting minimal to no greenhouse gas emissions during operation. Nevertheless, the production and disposal of renewable energy technologies, including solar panels and batteries, present environmental challenges that must be resolved through sustainable manufacturing practices and recycling programs. Another critical environmental factor is water consumption. Traditional energy generation methods, particularly coal and nuclear power facilities, necessitate substantial quantities of water for cooling, which can result in thermal pollution and water scarcity. Renewable energy technologies are generally more sustainable in water-stressed regions due to their lesser water usage.
Legal
?The energy and power sector is significantly influenced by legal factors, which establish the regulatory environment in which companies operate. The development, deployment, and operation of energy technologies and infrastructure are influenced by the energy policies, regulations, and standards established by governments and international bodies. Environmental regulations significantly influence the energy sector. The implementation of rigorous regulations by governments worldwide is aimed at reducing greenhouse gas emissions, controlling air and water pollution, and safeguarding natural resources. For example, the European Union's Emission Trading System (ETS) establishes a limit on carbon emissions and permits the trading of emission allowances, thereby motivating businesses to decrease their carbon footprint. Companies are obligated to implement sustainable practices and invest in cleaner technologies in order to comply with these regulations. Renewable energy mandates and targets are essential legal catalysts for the sector. In order to encourage the utilization of renewable energy, numerous nations have implemented renewable portfolio standards (RPS) or feed-in tariffs. These policies necessitate that utilities either source a specific proportion of their energy from renewable sources or offer financial incentives to renewable energy producers. For instance, the Renewable Energy Sources Act (EEG) of Germany provides feed-in tariffs for renewable energy, which has significantly stimulated the sector's growth.
Major companies and their details
ExxonMobil
ExxonMobil's revenue from the energy and power sector in 2023 and 2024 is primarily derived from its upstream and downstream operations. Approximately $290 billion in revenues were reported by ExxonMobil in 2023, with significant contributions from its oil and gas exploration and production activities. Research and development (R&D) initiatives were directed toward the enhancement of operational efficiency and the advancement of technologies in renewable energy solutions and carbon capture and storage (CCSs). ExxonMobil is engaged in three primary segments: Chemicals, Downstream, and Upstream. The energy and power sector is directly influenced by the exploration, development, and production of crude oil and natural gas, which are all part of the Upstream segment. Crude oil is refined, and refined products are marketed globally as part of downstream activities. The Chemicals segment produces petrochemicals for use in a variety of industries. ExxonMobil is estimated to have a global market share of approximately 5% in the energy and power sector. The company's substantial market presence is a result of its global operational footprint, technological leadership, and extensive upstream and downstream capabilities.
Royal Dutch Shell
In 2023 and 2024, Royal Dutch Shell reported revenues of approximately $340 billion from the energy sector. Its revenue streams were distributed among its downstream refining and marketing operations, integrated gas activities, including LNG, and upstream oil and gas production. Renewable energy technologies, including offshore wind, solar, and hydrogen, as well as advancements in energy efficiency and carbon management, were the primary focus of research and development. Shell is divided into three primary segments: Upstream, Integrated Gas, and Downstream. The energy and power sector is dependent on the exploration and production of crude oil and natural gas, which are the primary focus of the upstream segment. LNG activities are included in Integrated Gas, whereas Downstream incorporates the refining, marketing, and trading of petroleum products and chemicals. Royal Dutch Shell is estimated to have a global market share of approximately 6% in the energy and power sector. Strategic investments in renewable energy and low-carbon technologies, in conjunction with the company's robust LNG presence, have significantly improved its global competitiveness.
BP (British Petroleum)
In 2023 and 2024, BP reported substantial revenues from the energy sector, which amounted to approximately $280 billion. Upstream oil and gas exploration and production, downstream refining, and marketing operations were the primary sources of revenue. The primary focus of research and development was the advancement of renewable energy technologies, such as solar, wind, and biofuels, as well as initiatives in carbon capture, utilization, and storage (CCUS). BP is divided into three primary segments: Rosneft, Upstream, and Downstream. Exploration and production activities, which are essential for the energy and power sector, are included in the upstream segment. Petroleum products are refined, marketed, and traded in downstream activities. Rosneft represents BP's interest in the Russian energy and gas sector. BP is estimated to have a global market share of approximately 4% in the energy and power sector. The company's competitive advantage in the global energy landscape is a result of its strong presence in key markets, investments in renewable energy and low-carbon solutions, and diversified portfolio.
Chevron Corporation
In 2023 and 2024, Chevron Corporation generated considerable revenue from the energy and power sector, which was primarily attributed to its operations in downstream refining and marketing, as well as upstream exploration and production. Chevron's revenues of approximately $250 billion in 2023 were indicative of its robust position in the global oil and gas markets. Research and development initiatives were concentrated on the advancement of technology in the areas of operational efficiency, environmental sustainability, and digitalization. Chevron is primarily engaged in two segments: Upstream and Downstream. The energy and power sector is directly impacted by the exploration, development, and production of crude oil and natural gas in the Upstream segment. Crude oil is refined, and refined products are marketed globally as part of downstream activities. Chevron is estimated to have a global market share of approximately 3% in the energy and power sector. The company's competitive position in the global energy market is bolstered by its investments in technology and innovation, as well as its integrated approach to upstream and downstream operations.
TotalEnergies
In 2023 and 2024, TotalEnergies (formerly Total S.A.) reported substantial revenues from the energy sector, which amounted to approximately $200 billion. The company's revenue streams were diverse, encompassing exploration and production, refining, marketing, and renewable energy solutions. Research and development initiatives were concentrated on the advancement of technologies in the fields of energy storage, renewable energies, and digital solutions for energy efficiency. TotalEnergies is divided into three primary segments: Exploration & Production, Gas, Renewables & Power, and Refining & Chemicals. The Exploration & Production segment is responsible for the exploration and production of oil and gas. Gas, Renewables & Power encompasses energy storage solutions, renewable energy sources (wind, solar), and LNG. Refining & Chemicals is the process of refining crude oil and the production of petrochemicals. TotalEnergies is estimated to have a global market share of approximately 3% in the energy and power sector.
Recent developments
Conclusion
ArcelorMittal Brazil, the Brazilian subsidiary of the company, disclosed in April 2023 that it had established a joint venture with Casa dos Ventos, a Brazilian renewable energy company, to develop the 554 MW Babilonia wind power project. In the central region of Bahia, northeast Brazil, the project will be implemented at a cost of USD 800 million. Casa dos Ventos will possess the remaining share, while ArcelorMittal will retain a 55% stake in the joint venture.
The Indian government authorized the construction of ten nuclear reactors in five Indian regions in April 2023. The center has granted administrative and financial sanctions for a fleet of ten indigenous 700 MW pressurized heavy water reactors. Karnataka, Haryana, Madhya Pradesh, and Rajasthan will construct the ten reactors.
The global energy and power market is currently experiencing significant transformations, including a transition toward renewable energy sources, technological advancements, and changing consumer preferences. Substantial investments and advancements have occurred within the sector in recent years. Renewable energy constituted 28% of global electricity generation as of 2023, with solar and wind power taking the lead due to government incentives and decreasing costs. Despite efforts to decarbonize, fossil fuels continue to dominate, with oil and natural gas satisfying more than 50% of the world's energy needs. This underscores the ongoing dependence on these sources.
Looking ahead, the energy market's future is being increasingly influenced by technological disruptions and sustainability imperatives. According to projections, by 2024, renewable energy is expected to account for 36% of global electricity generation. Enhanced storage technologies, grid integration enhancements, and scaling efficiencies in renewable production are driving this growth. The implementation of stringent emission targets and incentives for the adoption of renewable energy by governments worldwide is further accelerating the transition.
Additionally, the distribution and consumption of energy are being transformed by advancements in digitalization, smart infrastructure, and energy storage. The transportation sector is on the brink of a disruption, as global EV sales are anticipated to reach 45 million units annually by 2040. This will result in a surge in electricity demand and a transformation of energy demand dynamics. Energy efficiency measures are also essential, as investments in building retrofitting and industrial process optimizations reduce overall energy consumption.
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