Updated: Feb 18
I’m excited about the future of energy. Granted, unknowns abound, and ambiguity persists. It’s also fair to say the energy sector faces greater complexity than at any other time in recent memory. Even so, there’s a new year just around the corner, and I’m optimistic about what that means for energy in Canada, and businesses nationwide.
1. The energy transition will be different for industries within this sector—and that’s a good thing. We are at the early stages of an “astounding” energy transition that will have a particularly powerful impact here, in Canada. Our national economy continues to be largely driven by natural resources. Thirty percent of our exports—and a considerable number of jobs—depend in some way on energy and transportation. Meanwhile, an ongoing $100 trillion clean energy revolution is reshaping the entire world. This landscape represents a unique set of risks for Power and Utilities, Oil and Gas, and Mining, respectively. The thing is, it’s what companies do in light of these risks that will define the future.
The shift to electric vehicles, the uptick in prosumer culture, and increasingly more affordable renewable energy sources (think solar and wind) mean different things for each industry. For mining, this is already bringing a surge in the need for minerals specifically tied to the development of batteries. For oil and gas that could look like a change in demand that drops progressively, over an extended number of years. The key is to zero in on how you can turn these evolving realities into meaningful progress for your organization and your own people. Whether you’re a utility leaning into risk to reframe what you do; or a professional services firm like my own, aligning offerings, skills, and capabilities against transformational challenges: evolving in line with the times doesn’t just serve your customers better. It creates exciting new possibilities for your people, rich career experiences, and an ability to recruit and retain top talent motivated by your visionary purpose.
2. Owning the disruption before it owns you can offer up a profitable route to future growth. In the last few years, we’ve seen example after example of companies that saw the renewable energy writing on the wall, and moved to proactively tackle that disruption. Whether we’re talking about a cluster of companies in Europe, working together to produce cleaner energy; or a global energy giant redefining corporate purpose to support a greener future: there are a lot of ways to take action.
Case in point: energy storage now represents a fast-emerging opportunity in clean technology. True, too, for wind farms, which are quickly becoming more cost-effective than coal production, even when plants already exist. Technology improves on an exponential curve, often much faster than forecasters can predict. Betting on the innovators, not the forecasters is the smart choice. But I’ll go one step further and say don’t only bet on them—become one yourself.
If the world is turning upside down, it’s time to flip your perspective. Look long and hard at holes you see in the market, and then dive inward to ask: how can our existing skills, talent base or organizational capabilities bridge those gaps? Whether that means seizing on evolving tax incentives to develop novel ways of storing clean energy or aligning with an incubator to fuel broad-based solutions, organizations that seek to shake up disruption can lead the way in a post-pandemic world.
3. No one can afford to view uncertain times as time to be wasted. Explore various scenarios linking what’s happening in the market now to what could happen next. What does that look like? We know ground electrification is inevitable, as electric cars morph from luxury items to mainstream vehicles. People everywhere are now poised to experience autonomy as a service, as opposed to something people buy (think the rise of ride-sharing, for example). What we’re building and producing is reshaping the supply chain, and driving new demand for metals like copper, nickel, lithium all as we witness the growing popularity of non-traditional sources, like hydrogen. Each of these shifts represents a moment in time that won’t come around twice. Waiting for calmer seas before exploring some of these areas could mean missing out all together.
It doesn’t matter who you are. A leading national energy company rethinking its identity for 2030, 2040 and beyond. A nimble start-up looking to invent the next component needed to bring solar energy to families everywhere. A professional services firm like my own, enabling enterprise-wide digital transformation to help companies unlock data in pursuit of innovative new energy solutions. There is something for everyone layered in the complexities of this transitional period. Be curious. Be entrepreneurial. Don’t let this time pass you by.
Massive transformation brings equally monumental opportunities and the way we explore that potential is what counts the most here, today, now. Things are complicated. But if the sector can become part of the change itself, I am confident Canada can lead the global energy transformation in an incredibly positive direction.
When I see Canada’s largest solar energy facility coming to life, I’m deeply inspired. There are so many ways for organizations here to play a vital role in defining what the future of energy can be—here, and everywhere. If that’s not a cause for optimism, I don’t know what it is.
Authored by Lance Mortlock (EY Canada Managing Partner, Energy & Haskayne School of Business Visiting Professor).