ENERGY

The global energy sector is dependent on fossils that are largely dependent on the discoveries and explorations made towards new hydrocarbon resources and it requires significant capital expenditure. Fossils remain largely dependent on future reserves that are at the greatest risk of being stranded as the world is warming fast.   Precisely, the resources and reserves in fossils are declining and the long-term impact of climate change creates a need for the sector to find alternative low-carbon sources. Currently, the energy investors are bewildered over the incompatibilities between international commitment to slash emissions and fossil fuel investments. Investors need to examine the pros and cons to assess the risks to identify the future capital expenditure on explorations and developments, and the long-term financial impact of climate change on the energy sector. 

Oil majors are unable to provide clean energy in the overloaded carbon world. Overall the fossil market remains bullish amidst volatility supported by the production cuts, and US sanctions on Venezuela and Iran. The market fundamentals are strong but the energy generated by oil and coal has declined over the last decade. In the last few years, natural gas accounted for 35 per cent of US electricity and coal for 27 per cent, and the power generation from wind and solar has topped the production of coal in the initial quarter of 2019. In the US, in the month of April, the green options – wind, solar, geothermal, biomass and hydropower projects generated more electricity than coal powered power plants. The advent of cheap lithium-ion batteries to store wind and solar energy has made green energies attractive and the investment in green energy generation is catching up faster than forecasts.