Impact on existing
In this section, we look at the impact of the energy transition on the current leaders of the energy system.
Fossil fuel demand reached a peak in 2019. It will bounce along a plateau for few years (a Mount Fuji shape) and then fall off a cliff by the end of the decade. This chart sets out the central forecast of Rystad, but there are many others (DNV, BP, IEA, McKinsey for example) with a similar shaped trajectory. The transition from growth to decline will have a dramatic impact on incumbent fossil fuel producers.
The energy transition
Chart source: Rystad 1.6 degree scenario
Key Reports
Decline and Fall: The Size & Vulnerability of the Fossil Fuel System
The fossil fuel system has tens of trillions of dollars of fixed assets and is linked to around a quarter of the equity market, half the bond market, and half US bank syndicated loads. We set out the size and vulnerability of the system and explain why disruption strikes at the peak of fossil fuel demand.
Was 2019 the peak of the fossil fuel era?
The IEA's latest projections imply peak fossil fuel demand was indeed 2019.
Zero emission conference Norway
A video presentation for the Zero emissions conference. The consequences of the energy transition for financial markets, with an emphasis on plastics.
Watch the video or listen to the audio.
The Future’s Not in Plastics: Why plastics demand won’t rescue the oil sector
Plastics impose a huge unpaid externality cost on society of around $1,000 per tonne. As governments start to address this, so plastics demand will stop rising. This will create huge stranded assets and peak oil demand.
COVID-19 and the energy transition: crisis as midwife to the new
Cyclical shocks like COVID tend to speed up ongoing structural change. So COVID is likely to bring forward the peak of fossil fuel demand to 2019.
A New World: The Geopolitics of the Energy Transition
Written with IRENA. The energy transition will have a dramatic impact on geopolitics as it reduces the influence of petrostates, enables energy independence for fossil fuel importers and enhances the power of new energy technology exporters.
The end of the ICE age
Written in 2017, this piece argued that demand for conventional cars was about to peak, implying automotive sector disruption.
*Trusted Sources now trades as TS Lombard.