Revealed: Top five energy trends in 2017 - Gulf Business
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Revealed: Top five energy trends in 2017

Revealed: Top five energy trends in 2017

Regulators and policy makers are adopting new technologies in the energy sector

The global energy sector will continue to face changes in 2017, across oil and gas as well the renewables industries, according to a report by Booz Allen Hamilton.

In oil and gas, 2016 was a year of continued overproduction. While increased oil inventory reduced US shale production, it did not boost demand that was needed to bring the global market into balance.

“In the Middle East, a prolonged period of low oil prices has impacted government spending but the move toward economic diversification and reduced reliance on oil is prompting greater investment in high-potential sectors including real estate, construction, hospitality, tourism and education,” the report stated.

There is also a greater focus on achieving operational efficiency across sectors in the region.

In utilities and electric power, the traditional supply chain is undergoing change driven primarily by regulation, public policy, plentiful inexpensive natural gas, and dramatic cost declines in renewable energy and storage, it said.

Walid Fayad, executive vice president at Booz Allen Hamilton MENA said: “Energy and technology form the backbone of global economies and play a crucial role in driving the operational success of all other sectors. As innovation and technological disruption become the norm across the MENA region, we are increasingly seeing regulators and policy makers embracing game-changing trends in the energy sector – from support of renewable energy, advanced metering, and grid modernisation to big data and cloud.

“We expect that wider adoption of these technologies will increase overall operational efficiencies, especially in the wake of a period of prolonged low oil prices.”

Booz Allen Hamilton forecast the following five trends for the energy industry in 2017:

1. Focus on capital expenditure productivity

Market shifts are putting capital programme execution under major pressure in both the oil and gas and electric power industries. In oil and gas, the global “lower for longer” cycle of oil prices has executives and boards of Integrated Oil Companies, National Oil Companies, and oilfield service providers placing high scrutiny on exploration and production activities. Industry leaders are pursuing everything from technology and information innovation, to greater personnel and asset tracking in oilfield development in an effort to drive greater labour and material productivity.

In the electric power industry, inexpensive natural gas has already caused a collapse in the construction of new coal plants, and nuclear power is now in danger of a similar decline.

Across the entire energy spectrum, companies are taking steps to develop the capability to conduct deep continuous analysis of their capital projects during execution, and leaders are finding ways to put the insights they gain into management action.

2. Creating enterprise value from data

Like many industries, the energy sector has seen the amount of data from its operations skyrocket as advanced instrumentation and metering has been implemented. Only the most accessible benefits from this data have been realised so far, mainly focused on identifying opportunities for cost savings through labour elimination and incremental improvements to existing processes.

While analytics in the industry is nothing new, companies are only starting to scratch the surface of how data can create new value within existing businesses.

Organisationally, companies across the energy spectrum are growing centralised data science teams, often blending legacy employees with new, more data science-oriented hires. The hard work of building business cases for data science is just beginning.

3. Using markets to shape the future grid

Public sector support of renewable energy, advanced metering, and grid modernisation over the past five years – in the form of mandatory deployment standards, and direct and indirect subsidies – have been very effective at driving down the costs of these advanced energy technologies, spurring their broader deployment.

As regulators and policy makers consider what comes next, they are increasingly moving from a standards-and-subsidy approach to one that is more market-driven.

4. Following security to the operational edge

Across the energy sector, security has been focused primarily on protecting company and customer data on corporate systems. With the increase in instrumentation, automation, and virtualisation of operational assets – the rise of the Internet of Things – the security frontier is moving to the operational edge, and is growing in importance.

5. Innovation is the tipping point for cloud

In most industries, the decision to migrate IT infrastructure from fixed, on-premises servers to cloud-enabled as-a-service models has been heavily based on cost. This was true for many corporate systems at the oil supermajors, but it is innovation that’s driving the current wave of cloud migration in the operational business units at these companies.

The rise of analytics within operational business units in order to create maximum business value is enabled by a digital strategy centered on the flexibility that the cloud provides.

In the utility industry, movement to the cloud has been delayed by ambiguity over how the costs of new service models are categorised.


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