Energy transition likely to face delay: EIC director

KUALA LUMPUR: There are growing concerns that the energy transition, which is in line with Net Zero 2050 aspirations, is likely to be delayed with global energy players shifting focus back to oil and gas (O&G) due to challenges faced in renewable energy (RE) projects, said Energy Industries Council (EIC) regional director Azman Nasir.

“In our EIC Survive and Thrive Report 2023 – based on insights from nearly 100 energy supply chain leaders globally, we found that supply chain companies have shifted their focus back to oil and gas, predominantly due to challenges related to availability of consistent work in renewables, and also due to challenges in profitability in renewable energy projects,” he said at the Oil and Gas Asia 2023 (OGA 2023) today.

He added that the report also revealed that oil and gas projects are far more likely to proceed with full funding, compared to renewable and transition technologies such as wind and hydrogen projects.

“These findings raise the prospect of rapidly widening disparities between green ambitions and the reality of what businesses actually see in their order books. Ultimately, these findings raise concerns that Net Zero 2050 commitments are likely to be delayed,” he said.

He added that the energy transition will be challenging to the global O&G industry and calls for more conversations and knowledge sharing among players and governments, which could lead to more realistic solutions.

Despite forecasting a turbulent period ahead for the future of energy, Azman believed that there is a great opportunity for key industry players to build and reimagine a more resilient and sustainable global energy system.

“Asia is already recognised as having huge potential to become a hub for energy transition initiatives and low carbon investments. Let’s capitalise on that point and not be swayed by narratives that are not suitable for this region,” he said.

Meanwhile, Economy Ministry deputy secretary-general (sectoral) Datuk Yatimah Sarjiman assured that the government is committed to ensure a just energy transition, attracting quality investment and investing in the future workforce.

“However, we also know the fact that it cannot be done without collaboration and support of the private sector. We would like to foster an ecosystem that promotes research, innovation and investments in clean energy technologies to coexist harmoniously with our conventional resources, which can only be done with strong support from the private sector. By working together, we can address any challenges and unlock new avenues for growth in the sector,” she said.

The event which is in its 19th edition, will take place until Sept 15 at the Kuala Lumpur Convention Centre, and anticipates the attendance of 2,000 local and foreign companies besides over 25,000 visitors from more than 60 countries.