SHOCKED by GHD Hero Report

A global temperature check
on the energy sector in an

era of profound uncertainty → shocked.ghd.com
The
This period of
extreme uncertainty
trilemma
provides a unique
opportunity to apply
scientific insight and
creative thinking to
the complexity of
the current global
energy crisis.
Three distinct, but interconnected, shocks — But there’s hope. While the situation might
security, society and climate — now confront sound dire, SHOCKED paints a picture of an
the energy sector. It is in the context of this industry at the cutting edge of innovation,
‘trilemma’ that GHD undertook SHOCKED: fully committed to the energy transition and
Foreword
one of the largest global research studies ever with the deep technical expertise to innovate
conducted among energy sector leaders. We and achieve emissions reduction goals. The
wanted to provide our partners with insight into barriers facing the industry are significant,
the current energy crisis and most importantly, but the sense of urgency and motivation to
an informed perspective on opportunities to achieve net zero by 2050 is greater. We have
de-risk the energy transition in this period the capability, the will and the means
of uncertainty. It is their businesses at the to succeed.
centre of this shock; businesses that are
being impacted from all angles — strategic, By pulling multiple levers simultaneously,
operational, financial and reputational. corporates, governments, public institutions
and private citizens can navigate the current
SHOCKED reveals that 94% of respondents energy crisis and prepare for future shocks.
I recall in 2007 hearing Al Gore speak at a global Underlying all of this, of course, is the ongoing believe the current energy crisis is the greatest With a focus on equity and inclusion, the
GHD event in Melbourne, Australia and being struck climate challenge and a growing appreciation of to have impacted their market in decades. It sector can also foster economic growth, job
then at the urgent solutions required to address the enormity of the infrastructure build required to also shows that the crisis has dented capital creation and global competitiveness in the
issues affecting both climate and society. adapt to � and mitigate the impacts of — a warming flows into projects, with CFOs who took part emerging clean energy market. We have an
planet. The ability to achieve global net-zero in the study estimating that investment levels opportunity right now to take considered,
Today, energy and its security are at the nexus of emissions goals is almost wholly reliant on a switch during the crisis (2020 to 2022) were USD203 collaborative action and reduce risk through
some of the most important megatrends impacting to renewable power generation and low-carbon billion lower than they otherwise would have sound advice, scientific rigour and
the world. fuels, which is pressuring the energy sector to been. Importantly, in this critical decade for innovative engineering.
decarbonise first and fast. energy transition, half of leaders (47%) say the
We are now feeling the aftershocks of seismic crisis has decelerated their net-zero plans by In what will soon be 100 years of operation for
geopolitical tensions that have propelled energy This period of extreme uncertainty provides a an average of six years. What is clear is that GHD, we are increasingly being called upon
security to the top of the corporate and political unique opportunity to apply scientific insight and this energy crisis is unique and will transform to guide enduring and sustainable change. By
agenda. The ripples across trade and finance have creative thinking to the complexity of the current the sector forever. Unlike previous crises — galvanising our efforts, we can ensure that the
permanently transformed the energy market; this global energy crisis. Co-creating an enduring such as the oil shocks of the 1970s and 1990s energy transition paves the way for a more
disruption is impacting economies and communities transformation and exploring new technical and — the current shock is global, multifaceted sustainable, prosperous and resilient world for
more significantly than ever before. Rising energy engineered solutions with policymakers and energy and multidimensional. Crucially, underlying the generations to come.
Ashley Wright
prices are driving a cost-of-living crisis that is leaders will strengthen a shared commitment toward current focus on energy security is a drive to
leading to direct government intervention in energy not only a sustainable transition, but a just one. To decarbonise that is set to reshape the sector
markets across the globe. stay the course to a net-zero future, we must take beyond recognition.
rational, collective action and explore all potential Chief Executive Officer, GHD
routes out of the current maelstrom.
2 | SHOCKED SHOCKED | 3
Table of
contents
6 Methodology
De-risking the
8 Executive summary
energy transition
12 Introduction: A sector in SHOCK
16 01 The security shock
22
→
02 The society shock
30 03 The climate shock
40 Conclusion: A clarion call
45 Authors & Contacts

Methodology
2. Qualitative interviews with industry
thought leaders
In-depth interviews conducted with GHD’s partners and the wider global energy ecosystem to provide a layer of
qualitative insight to the research.
SHOCKED is one of the largest studies ever conducted among the global
energy sector C-suite. It utilises two core research methods. → Erin Bradley, Head of Business Development RNG Canada, Shell
1. Global quantitative opinion research

→ Scott Dodd, Director of Business Development, Enbridge
→ Professor Chris Greig, Senior Research Scientist, Princeton University;
An independent opinion research study interviewing 450 senior decision-makers in the energy sector Lead Study Author: Net Zero America and steering committee member,
from across the globe. The interviews took place in February and March 2023 and were conducted under Net Zero Australia
→ Kam Ho, Managing Director (Australia), Total Eren
450
the ethical research guidelines set by both the MRS (Market Research Society) and ESOMAR (European
→ Thierry Kalfon, CEO, Renewables Australia & South-East Asia, Engie

Society for Opinion and Market Research).
The SHOCKED sample → Danielle LaCroix, Senior Director, CNO Strategic Initiatives, Bruce Power
→ Dana Omran, Global Director, Strategy & Operations and Urban Power
→ Focus
Program Director, Resilient Cities Network
marketss
→ Amy Philbrook, Representative to the International Energy Agency Task 44
Energy sector senior

– Flexible Bioenergy
→ Alan Yu, Founder and CEO, LAVO
decision makers
Australia, Canada, Chile,
Germany, New Zealand,
Singapore, the Philippines, Credits
the UAE, the UK and the USA.
400 C-suite or heads of departments
Research design and concept development by GHD and Man Bites Dog.
Additional interviews were conducted with responsible for technology, strategy, operations,
leaders based in Brazil, China, Egypt, India and sustainability and/or compliance — referred to as
South Africa. ‘energy leaders’ throughout this study.
Regional breakdown: 50 CFOs to gauge the financial impact of the
39% 30% 31%

APAC Americas EMEA energy crisis.
Total electricity
7,555
capacity
From businesses with operations across the
energy supply chain including developing,
generating, transmitting, distributing and
20,946
retailing energy. gigawatts
Total gas capacity

delivered through
network per year
petajoules
Executive summary The trilemma
→ summarised The The The
security society climate
94%
shock: shock: shock:
Extreme market volatility Societal pressure on the The climate crisis

and geopolitical tensions energy sector to provide continues to force an
have put energy security reliable, affordable, low- acceleration of energy
high on the global agenda. carbon energy has never transition, but progress
been greater. towards net zero is being
impacted by the complex
76% 3/4
dynamics at play.
3/4
Over three-quarters Over
most severe
of energy leaders say the global of energy leaders say the
energy crisis is reducing the
of energy leaders believe
their industry is under more
decarbonise
energy crisis is the of energy leaders say the pressure than any other to
security of energy supply is
standard
42%
the number one concern for
their market has ever experienced. their organisation.
of living
203
across the globe.
71%
On average, energy
The crisis has restricted investment:

companies could continue
70 days
to supply energy in line with
normal demand for just
energy sector CFOs told us that say the current energy crisis has
accelerated their organisation’s
net-zero plans — by an average
USD
investment levels during the crisis were
of five years.
say consumer backlash
But almost half (47%) report that
Bn
from increased energy
bills is a grave threat to the crisis has decelerated their
if cut off from energy imports. their business. net-zero plans — by an average
of six years.
↓ lower than
they otherwise would have been.
key priorities
Five
Dr Tej Gidda, Global Leader — Future Energy,
identifies five key priorities to de-risk the transition.
to de-risk
the energy
transition
01
De-risking and unlocking capital flows will be critical to getting energy
projects to the point of financial investment decision, sooner. This will
require smart planning, permitting, policy and regulation frameworks to
drive returns from long-term investment into energy infrastructure, as well as
Unlocking money
new insurance products to deal with residual risk. It will also mean directing
02
and markets
more capital to R&D, early-stage pilot and demonstration projects and the
emerging energy tech start-up ecosystem.
Integrating well-thought-out design principles into new energy infrastructure

and retrofitting of existing infrastructure will be critical to help build resilience.
As the custodians of innovation, R&D teams in the world’s top energy
Supercharging
companies have a major role to play in developing new technical solutions to
03
engineered solutions
the problems faced by the sector.
A successful transition will require access to more and new streams of

raw materials and the re-tooling of entire supply chains. The current crisis
Priority
Carefully balancing
has emphasised the importance of resilient supply chains in maintaining
momentum on renewable energy projects and ensuring secure supply.
supply chains and Furthermore, attracting and (re)skilling the workforce of the future — both the
04
resources
next wave of graduates and existing industry talent — must be a top priority.
Energy companies must earn social acceptance for the infrastructure

projects and lifestyle changes needed for a successful transition. This will
require societal engagement and education at both a macro level — to build
Securing community broad acceptance of the need to invest in decarbonisation strategies —
understanding
and at a community level, where the energy infrastructure essential for the
05
and social acceptance
transition will be built.
A de-risked transition is one that is fair, balanced and just. Emerging markets
that have contributed the least to global warming must be able to access the
capital required to enable the switch to renewables, and the cost of transition
Ensuring a just must be spread fairly within countries and across communities, to ensure no
transition
one is left behind.
Introduction:
Introduction: A
A sector in
sector in SHOCK A multifaceted, multifuel crisis
The COVID-19
The top six
pandemic was a
More than nine in 10 energy leaders (94%) believe that the
current energy crisis is the most severe their market has ever
major contributor
experienced. Unlike previous crises, such as the oil shocks
cited causes
Energy sector leaders cite the increase in energy use
of the 1970s and 1990s, the current crisis is truly global
due to the economic rebound from the COVID-19
to the current
and multidimensional, impacting all parts of society. It is
pandemic as the leading cause of the current crisis.
underscored by a drive towards net zero that is reliant on the
The pandemic led to a sharp reduction in energy
crisis. Not only did it

energy sector following a rapid decarbonisation path and an
demand as the global economy stalled. As a result,
emerging appreciation of the enormity of the infrastructure
when the economy returned to growth, the industry
disrupt the market

build required to avoid the worst of climate change.
struggled to cope with the subsequent
of the current energy crisis upswing in demand.
1
equilibrium, but the
globally by energy leaders Leaders also identify the significant role that
What sets the current resulting supply

geopolitical tensions played in destabilising the
energy system. The Russian invasion of Ukraine,
crisis apart is the chain disruption

which sent energy prices soaring across the globe,
Increased energy use is undoubtedly one of the largest contributors.
associated with the strong
made it very difficult
2
sheer number of
However, increasing economic tensions between
economic rebound from the the US and China, as well as other regional and
to get hold of
COVID-19 pandemic
contributing factors.
market-level tensions, have restricted the supply
of materials essential for energy transition such as
There’s no quick fix. essential renewable

semiconductors and rare earth minerals. Countries
that depend on foreign energy imports have been
3
energy components,
Geopolitical tensions
Whereas previous
unable to guarantee reliable supply, resulting in
disruption and driving energy prices up further.
energy crises were putting many

There is no single cause that can be blamed for the
mainly about access projects on hold.

current crisis. It is the confluence of a multitude
Varying weather patterns of factors that has led to the volatility being
4
reducing renewable
to energy and
experienced by the sector and, as a result, a unique
energy output set of solutions will be required to overcome it.
Kam Ho
reducing its price,
this one also has a
Managing Director (Australia),
5
Supply chain issues
fundamental focus on
Total Eren
decarbonisation. Lack of natural gas
6
storage facilities
Scott Dodd
Director of Business Lack of largescale renewable
Development, Enbridge energy battery storage
Quantifying the SHOCK: The impact of the crisis
The CFO perspective on energy company finances
said said
no impact no impact
Building an energy system that moves us towards a lower-carbon future while providing greater resilience against future
Top 3
shocks is essential, yet costly. The current crisis has depleted capital flows into energy projects, according to the energy
sector CFOs included in our study. They estimate that investment levels in 2020, 2021 and 2022 were USD2031 billion
14% 24%
lower than they otherwise would have been.
CFOs cited upfront high capital costs as the largest barrier to
barriers
increased investment in energy infrastructure. The scale and
Impact on 54% Impact on 50%

complexity of these projects, coupled with technological
revenue profit
uncertainty and regulatory hurdles, further exacerbates
32%
financial risks. Regulatory and policy uncertainty was
also identified as a key barrier. Inconsistent or inadequate
26%
policy frameworks, as well as shifting political priorities,
can hinder the deployment of renewable and sustainable
energy technologies, resulting in a reluctance to commit
resources to long-term projects. Low returns were the
said + said - said + said -
positive negative positive negative
third most significant barrier, deterring potential investors
from allocating capital towards clean energy infrastructure
projects. The inherently long payback periods and
to increased impact impact impact impact
competition from other investments with higher short-term
returns can make investment in energy infrastructure
investment in energy by an
average
by an
average
by an
average
by an
average
less attractive. infrastructure of 11% of 15% of 10% of 17%
→ High capital costs

Together with an impact on investment levels across
the sector, CFOs are also feeling the pinch within their
→ Regulatory and policy

organisations. Over half (54%) state that the crisis has had a
negative impact on revenue, by an average of 15%, and half
said it had negatively impacted profits by an average of 17%.
uncertainty
→ Low returns Despite the abundance
of funds available, they
1 The CFO sample was presented with a breakdown of the combined invest-
ment levels across the global energy industry over the last three years (2020,
The energy transition has are not being deployed

2021 and 2022) which amounted to USD6.5 trillion (source: IEA). When asked
to estimate what investment levels would have been if the energy crisis had
led to the consolidation of quickly enough, as many

not happened, the average figure given was USD6.703 trillion – an increase of
USD203 billion or 3% in real terms.
enormous pools of private renewable energy projects

equity capital, which have are still considered too
been channeled into newly risky. To speed up the
established transition funds. worldwide transition to
Combined with a growing net-zero emissions, we
The financing of the energy We can’t talk about scale until global trend towards ESG must concentrate on
transition is crucial. Local we reduce these barriers. investing, changes in minimising the investment
energy companies see the regulatory environments risks associated with these
value, but they face high Dana Omran
and technology projects, allowing us to
barriers to investment. Global Director, Strategy & Operations
advancements, we stand unleash the tidal wave of
They cannot access the and Urban Power Program Director,
on the cusp of a once-in- financing available.
critical financing. Resilient Cities Network
a-generation opportunity
to structurally alter global Jason Fonti
energy networks. Global Leader — Origination, GHD
security
01 The security shock
01
The
At the centre of the current energy crisis is a severe

energy security shock. Leading energy companies
that rely on imported or otherwise procured energy
have suffered from skyrocketing prices and supply
chain disruption. How can we build more robust,
independent energy systems that can respond to
peaks and troughs in supply and demand?
To successfully navigate
the energy transition, the
sector will have to face a
trifecta of issues. Energy
will have to be affordable
and decarbonised, but
crucially there must be
energy security to create
any sort of reliable system.
Thierry Kalfon
CEO ENGIE Renewables Australia &
South-East Asia
Energy security has never been higher on
the agenda, with three-quarters of sector
Many South East Asian
countries are heavily
Cyber
dependent on imported
leaders identifying the security of supply as
energy to both electrify

the number one concern for
and decarbonise, be it
their organisation.
Effective management of
traditional sources such as
Amidst rising geopolitical tensions and
cybersecurity threats to
Geopolitical tensions are a key contributor to insecurity, with
oil, coal or gas, or future

the digitalisation of energy systems, the
energy networks requires
international conflict putting those dependent on imported
energy sector is increasingly vulnerable
options such as hydrogen
energy supplies and complex global supply chains at risk.
a multi-faceted approach
Almost three-quarters of energy sector leaders (74%) report to cyber-attacks. Over three-quarters
and renewable energy that includes robust risk
that geopolitical tensions are reducing energy security within of sector leaders (76%) believe the
through interconnections.
their country. And the energy industry is feeling the pressure
decentralised nature of modern energy
assessments, regular
from governments to mitigate this shock: 62% of sector
grids has increased the risk of cyber-
This means that system audits, ongoing
leaders say their organisation has never felt more pressure
attacks. These attacks can result in supply
geopolitical threats
from national governments to maintain secure
Supply threat
employee training and the
energy supplies. disruption on an enormous scale, with
can very quickly cause

devastating effects.
implementation of advanced
significant supply issues. cybersecurity technologies.
Coupled with extraordinary Cybersecurity is a very By taking a proactive and
comprehensive approach to
Despite the pressure to boost security, on average, energy
growth in energy demand real and growing threat to

companies report they could continue to supply energy in
fueled by growing energy networks in city cybersecurity, the energy

line with normal demand for just 70 days if they were cut
industry can minimise the risk

off from energy imports. Even more concerningly, 10% of
populations and rapid environments. Rio de Janeiro

respondents indicate they would be able to maintain supply
economic development, and Cali have identified of cyber attacks and ensure
for 20 days or less in this situation.
the reliable delivery of critical

Proportion of leaders who say security of
energy supply is the number one concern for
energy supply chains are cyber-attacks as being a
their organisation:
likely to be stretched well particular area of concern, energy services.
75% into the future. A supply
shock is a very real risk.
with service delivery
being compromised.
It’s important to remember
that cybersecurity is not
just a technical issue, it is a
Global average
78% Lucas Blight Dana Omran

fundamental aspect of trust
in the digital age. Without it,
Future Energy Leader — Asia, GHD Global Director, Strategy & Operations
the benefits of technology

APAC
69%
and Urban Power Program Director,
are at risk of being

Resilient Cities Network
overshadowed by its
potential harms.
Americas
78%
Energy companies are aware of the
importance of robust online networks in
Salman Bin Tayyab
ensuring energy security. Sector leaders
EMEA identify cybersecurity and digitalisation as
the top two areas where their organisation Market Leader, Western Canada,
has accelerated investment in the past 12 GHD Digital
months, and 77% identify cybersecurity
innovation as an effective strategy for
improving energy security. For example,
some companies are introducing AI-driven
monitoring services into legacy systems to
help detect and respond quickly
to threats.
The GHD View: Integration and
collaboration are key
Building SHOCK-resistance enablers of the energy
to de-risk the transition transition. The integrated
utility sector holds one
Steps to energy independence

of the keys to achieving
net zero by 2050,
Energy security is a critical concern as we advance through
the energy transition, with the potential for shocks arising from
particularly in remote
global market dynamics and geopolitical factors. To address
communities and island

these challenges, diversifying energy sources, fostering regional
interconnectivity and developing and deploying large-scale, low-
nations. Utilities can

There is no one-size-fits-all method for adapting to an But leaders also recognise the importance of homegrown
renewable energy generation, with 72% identifying this as cost energy storage will be paramount.
increasingly volatile ecosystem; the answer is complex.
drive climate resiliency

But key strategies include improved interconnection, an effective security-boosting strategy. For those countries
Collaboration among nations and a focus on shared goals will also
and decarbonisation
homegrown renewable energy generation and diversification with limited access to renewable resources, driving energy
be essential to ensure stability and resilience in the face of energy
of supply. independence may mean utilising alternative clean
across all energy

security threats. By adopting a forward-looking strategy that
energy sources.
prioritises sustainable and diverse energy portfolios, the sector
networks by navigating
Our research highlights the need for an energy system that is
Energy leaders also told us that by increasing reserve can navigate potential shocks and forge a path towards a secure,
connected but not dependent. More than seven in 10 energy
the complexities of
capacity, countries can ensure they are prepared for future decarbonised and resilient energy future for all.
leaders (72%) believe that increasing interconnections
→ Read more: Waratah Super Battery
energy integration and
between countries and regions is an effective strategy for shocks. Three-quarters of energy leaders identify large-
improving energy security. scale storage as an effective strategy for improving
strategic optimisation.
Key strategies for improving
energy security
The energy crisis has

highlighted the need for the From pipes to wires and
energy security independence of energy.
Nuclear can provide this as
the rise of distributed
energy, utilities can help
72% 72%
it is localised, reliable and create an equitable,
Stronger links Increasing domestic supply clean. Nuclear could work as sustainable and fair
the prime base-load energy future for all.
source for a centralised
of energy leaders identify increasing identify focusing on homegrown
grid, supplemented by Robert Dysiewicz,
interconnections between countries renewable energy generation as an decentralised, renewables- Future Energy — Global Innovation
and regions as an effective strategy for powered grids to meet peak Leader, GHD
energy needs.
effective strategy.
70% 75%
improving energy security.
Increasing the mix Boosting reserves Danielle LaCroix

Senior Director, CNO Strategic
Initiative, Bruce Power
identify diversifying supply as identify large-scale energy
an effective strategy. storage as an effective strategy.
society
02
The
02 The society shock
Every facet of society — from businesses to

households — is feeling the effects of the energy
crisis. Societal pressure to ensure reliable energy
supply and lower bills, while also reducing emissions,
is rising. But, at the same time, community
opposition is putting a blocker on the projects
needed to get this vital infrastructure built. How can
the energy sector work with governments to engage
communities with the realities of the transition?
Affordable, reliable, lower-

carbon energy, such as
renewable natural gas,
should not be taken for
granted. We need policies
and extensive collaboration
between people, companies
and governments to create
a framework to produce
this energy.
Erin Bradley
Head of Business Development RNG
Canada, Shell
Almost three-quarters of energy sector leaders (74%) Energy companies are feeling the pressure themselves, with
say energy prices are currently the biggest contributor to 71% saying consumer backlash from increased energy bills
inflation and 72% say the energy crisis is contributing to a is a grave threat to their business. With the energy sector
States of shock:
global recession. This has knock-on effects for every part of under the spotlight like never before, how — and to what
76%
The spectrum
society, with over three-quarters of energy sector leaders degree — the industry works with government partners to
(76%) saying the energy crisis is reducing the standard mitigate the most severe impacts of the crisis is one of the
3/4
National policy that works
of living across the globe and 78% believing increases in biggest challenges facing boardrooms today.
of government
energy prices have the biggest impact on the poorest parts
out of sync with the

of society.
rest of the world creates

Over three-quarters intervention additional uncertainty
Almost
and imbalance in the
system. For example, while
the Inflation Reduction
Smart policy frameworks and targeted government
Act (IRA) promotes US

intervention are important levers to increasing the
resilience of energy systems around the world.
manufacturing and
According to 76% of energy sector leaders — who
clean energy technology

represented businesses across the energy supply chain,
including developers, producers and retailers — the
development, it remains
role of government in the current energy crisis is more
The top five

to be seen whether this
important than ever.
of energy leaders say the

energy crisis is reducing the policy will accelerate the
inflation ↑
supported
of energy sector leaders (74%) global energy transition
say energy prices are the standard and if allied nations will
interventions
biggest contributor to impose trade barriers
of living to safeguard their own
across the globe supply chains.
1
to ease the societal impact of
Given that the subsidy
the energy crisis
Low-interest loans to energy model set by the IRA
companies to help smooth will be difficult for other
2
countries to match, the US
government may need to
wholesale price increases.
Energy bill reduction, funded find mechanisms to enable

other countries to benefit
3
from it. A coordinated
through general taxation.
Throughout the energy transition, we need to global approach,

bring communities and the general public along Levies on energy bills to beyond domestic policy,
with us and ensure energy access is affordable is needed to support
4
and universal. The transition needs to be a just and
subsidise the poorest in society.
the world’s emissions
equitable one, addressing social issues such as skills, reduction efforts.
jobs and human rights alongside mitigating negative State-backed liquidity support
environmental impacts. schemes to manage price
5
volatility. Marie-France Gravelle
Anna Jakobsen
Future Energy Lead — Canada, GHD
Windfall tax on energy
company profits to fund lower
EMEA Leader — Sustainability, Resilience and ESG, GHD
energy bills for consumers.
When it comes to community engagement,
it’s not just about talking the talk but
Social acceptance walking the walk. Communities want an
to succeed
ongoing partnership with asset owners.
A much greater, concerted On average, energy infrastructure assets
and multi-faceted effort is have a lifespan of 30–40 years, which
needed from governments means energy companies becoming part
across the globe to of the community and sharing their lives
Building energy system resilience will require the development
help people appreciate

of new infrastructure and upgrades to existing assets on a huge
for decades.
scale. Yet 70% of energy sector leaders identify community
the enormity of the

opposition as one of the largest obstacles to getting new
infrastructure challenge
projects approved.
The percentage of energy leaders who say community Thierry Kalfon

opposition is one of the largest obstacles to getting
we face in order to avoid or
mitigate the worst impacts
new projects approved:
CEO, Renewables Australia and South-East Asia, Engie
70% of climate change. It needs

to be taught in schools,
Global average
communicated through
71% all forms of media and
spearheaded by trusted
APAC global authorities.
72% This bipartisan and wide-
reaching public education
campaign will require skilled
Americas
67% communicators to drive a

collective understanding
of the trade-offs needed
EMEA
in order to accelerate the

energy transition. We need
Successful energy diversification and transition will require
to be able to compare and

significant infrastructure development, so it will be critical
contrast any negative local

to secure the support of local communities. This will require
authentic, honest conversations around the realities of
impacts with the very real

building more resilient systems that can weather shocks,
and meaningful benefits

including discussion of the scale of the transition and
the costs involved. Here again, the role of government is
that affected communities

key; public awareness campaigns that speak to both the
will derive from the

challenges and opportunities ahead will lay the foundation
for a more informed debate around the trade-offs that will
transition, now and for

need to be made at a community level.
generations to come.
The energy sector itself also has a key role to play. Three-
quarters of energy leaders (74%) believe the sector needs
to get better at educating communities on the need for
Malcolm Rushin
transition. When proposing new projects, companies need
to make the time to meet with the communities they will be
operating in, listen to their concerns and co-design solutions Future Energy Leader — Australia,
that are acceptable to them.
GHD
The GHD View:
Building SHOCK-resistance to
de-risk the transition
Skills shortages
Societal acceptance and pressure play a crucial role in shaping the trajectory of
the energy transition. As awareness around the urgent need for climate action
grows, public opinion is increasingly influencing policy decisions and corporate
Building a more resilient energy system relies on a workforce equipped with the necessary skills to shape a strategies. To harness this momentum and foster societal buy-in, transparent
new economy, yet seven in 10 energy leaders (70%) say the industry lacks the skills and expertise required to communication, stakeholder engagement and inclusive decision-making
manage disruption. Utilising the deep engineering expertise that already exists across traditional parts of the processes are essential.
industry and helping staff re-skill for a low-carbon future should be a central part of transition planning.
By actively addressing local concerns; demonstrating the benefits of renewable

energy; and providing equitable access to clean technologies, the sector
Indeed, attracting and (re)skilling the workforce

can cultivate a shared sense of responsibility and commitment to the energy
of the future — both the next wave of

transition. Ultimately, embracing societal acceptance and leveraging societal
pressure will help catalyse the transformation towards a decarbonised,
graduates and those incumbent in the industry sustainable and just energy future for all.
— is a key priority for the industry and the → Read more: Hydrogen and the art of building community understanding
wider education system.
Dr Tej Gidda
Global Leader — Future Energy, GHD
climate
03
The
03 The climate shock
The climate crisis, and the energy transition required

to mitigate its impact, is the greatest disruption
the sector has ever faced — but it also offers the
greatest opportunity. With the current crisis resulting
in a more disjointed move towards net zero, how
can the energy sector build resilience against
climate shocks and play its role in helping the wider
economy decarbonise?
The energy sector is on the front line of the battle against the climate
crisis, and the switch to a net-zero global economy is almost wholly
dependent on a swift transition to zero- and low-carbon energy. Over
three-quarters of energy sector leaders (76%) believe their industry is
under more pressure than any other to decarbonise. What’s more, they
believe the sector will have to go further: 71% believe a global net zero will
require the energy sector to achieve ‘net-negative’ emissions.
Achieving net-zero emissions by

2050 is a daunting challenge. We
need to break down our climate
goals and commit to interim
steps to make real headway.
Setting goals too far in the
future can impede progress.
Danielle LaCroix
Senior Director, CNO Strategic
Initiatives, Bruce Power
The impact of the Energy companies’
energy crisis on investment in net zero
energy organisations’ in the past 12 months
net-zero plans
No impact
on net-zero
plans No
impact
11%
14%
Impact:
47%
Without a low-carbon energy sector, other sectors cannot hope to decarbonise. As companies all look to reduce their
energy Investment 47%

emissions, they are using their buying power to force energy companies to decarbonise their supply. Seven in 10 energy
crisis in net zero

leaders say their organisation is feeling more pressure than ever from customers looking to reduce their Scope 2 emissions.
Proportion of energy sector leaders who are feeling more pressure than ever from customers looking to reduce 42%
their Scope 2 emissions: 39%
70% ↙ ↗
↗ ↙
Accelerated Decelerated Decreased Increased
Global average
75% net-zero
plans
net-zero plans
by 6 years
investment investment
APAC by 5 years
70%
Americas
65%
We currently lack the coordination across the system to
deliver the net-zero transition by mid-century. Supply
EMEA
Net zero on the back burner?

chains need to be perfectly in sync, infrastructure
delivery and workforce mobilisation need to be aligned.
Ultimately policy also needs to be bipartisan — but this
is still too fractured currently. Even if we agree on a set
of solutions to the energy crisis, we need to agree to
When it comes to net-zero strategy, energy organisations and large energy consumers are taking the lead. Our study finds that
nine in 10 energy sector leaders (91%) say their organisation has a net-zero strategy in place — and 4% have already achieved
support them together.

net zero. Meanwhile, just 40% of Fortune 500 companies across all sectors state they have a net-zero target. However, our
study suggests that the current crisis, and the resulting focus on energy security, may be pushing net zero down the priority
Unfortunately, our commitment and collaboration

list for the global energy C-suite. Over seven in 10 leaders (71%) believe a renewed focus on security within energy company
boardrooms is happening at the expense of decarbonisation strategy planning.
will only last until something else, like energy prices,

becomes more important.
There is a noticeable split in the sector. Almost half of the energy leaders in our study (47%) say the global energy crisis has
decelerated their organisation’s net-zero plans — by an average of six years — and 39% indicate that their organisation has
decelerated its investment in achieving net zero in the past 12 months. On the other hand, 42% say that the energy crisis has
accelerated their organisation’s net-zero plans — by an average of five years. And almost half (47%) say their organisation has
moderately or significantly increased its investment in achieving net zero in the last 12 months. This divergence in net-zero
plans risks slowing down progress across the board; to build a more resilient system, all parts of the energy system must move
Professor Chris Greig
in the same direction at the same pace. Senior Research Scientist and Lead Study Author: Net Zero America,
Princeton University
The crisis is driving diversification
The extent to which the global energy crisis has Despite the global energy
crisis, the fundamentals
Though the current crisis may have put the brakes on net-
zero strategies for many companies, our research reveals impacted energy companies’ investment in increasing
of renewable energy have

that the resulting volatility in natural gas prices is driving the their renewable energy mix over the past 12 months: The current crisis is spurring innovation in the race to net
not changed. Solar PV

diversification of energy assets. Seven in 10 energy sector zero. On average, the leaders we surveyed reported that their
66%
leaders say that the volatility of natural gas prices over the organisations have allocated two dollars in every five of their
and onshore wind remain

past 12 months has accelerated their business’ adoption of R&D spend to decarbonisation and transition technology
16%
the cheapest ways of
renewable energy generation assets — rising to over over the past year. While wind and solar will be the key
three-quarters of the leaders in high-growth businesses sources of energy as supply transitions to renewables,
17% adding new electricity-

(77%). And 44% of energy sector leaders say this volatility many companies are starting to deploy nascent clean
generating capacity in
has decelerated their adoption of coal assets. energy technologies.
Global average
most countries today.
Renewable energy will be the central component in the Emerging technological solutions companies are
energy sector’s response to the climate crisis. Almost all
71% deploying to decarbonise energy supplies:
11%
the leaders in our study (99%) have a strategy in place to
The opportunity for

increase their renewable energy mix. And for the most part, Technological
17%
companies to accelerate
investment in renewables has continued or accelerated Percentage of
solution for
despite the crisis: 17% of leaders say the global energy companies deploying
their investment is
decarbonising
crisis has had no impact on their organisation’s investment this technology
energy supplies
APAC
boosted by clear policy
in renewables, and two-thirds say it has accelerated
66%
60%
investment. This is compared to just 16% that say their
and incentives, such as

organisation has decreased investment in the past
15%
the Inflation Reduction
12 months.
18% Act in the US, or slowed

Carbon capture and storage
Energy diversification by uncertainty around
will be key to mitigating 54% the route to market and
Americas
security risks and the 60%

planning issues found in
companies investing in 22%
Large-scale energy storage
UK and Germany.
renewables will benefit
in the long run. In the
15% 38%
Tom Foley
coming year, we will EMEA
see a record amount
Bioenergy/biofuels Future Energy Lead — EMEA, GHD
of investment in 31%
Accelerated investment
renewables.
Hydrogen can play an
Decelerated investment
important role in de-risking

No impact
Green hydrogen
Kam Ho
the clean energy transition.
The core challenge with
Managing Director (Australia), Three-fifths of leaders say their company is deploying
renewable energy is not

carbon capture and storage — a critical technology for most
Total Eren
generation — it’s storage.

current net-zero scenarios. Over half of companies (54%)
are deploying large-scale energy storage solutions, which will
Hydrogen storage and

be key to overcoming any intermittency issues that arise as
batteries will allow us to

a result of the switch to renewables — enabling the sector to
support the economy while decarbonising. And a significant
store this energy and use it

proportion of companies are starting to harness the potential
when needed.
of different renewable generation assets, such as biofuels
and low-carbon hydrogen. Three-fifths of energy leaders say
the global energy crisis has accelerated their organisation’s
investment in hydrogen over the past 12 months.
Alan Yu
Founder and CEO, LAVO
Driving growth through
digitalisation
What are the characteristics of energy companies that continued a strong growth path throughout the energy
crisis? Our research shows that these businesses are focused on tech, with 80% of high-growth companies
71% 66% 64%

identifying digitalisation as an effective strategy to support the decarbonisation of energy supplies.
High-growth companies are focusing their investment on making energy smarter through advanced tools and
transition technology. Over the past 12 months:
of high-growth companies have accelerated have accelerated

have accelerated investment in investment in
investment in artificial smart grids. transition technology.
intelligence.
This increased digitisation goes hand-in-hand with a focus on cybersecurity, with 76% of high-growth companies
having accelerated investment in this area over the past 12 months.
→ Read more: Mapping Tucson’s journey to carbon neutrality
The path to energy security requires communities to

apply big data, “systems thinking” and technology to a
complex topic that is interrelated to many other large,
complex topics and bodies of data. These include
climate change and energy transition, transportation
decarbonisation, racial injustice and social equity,
resiliency modelling, human behaviour prediction, etc.
Biofuels will be key to resolving issues around Technology is essential to address the challenge
energy security, societal issues and climate holistically: Understand inputs (what data is needed,
change. They can replace fossil fuels as a base-load how to access it, how to use it), develop the outcomes
energy source, change society’s perceptions of the (model the range of future state scenarios, adjust for
need for a mix of energy sources and reduce our uncertainty) and communicate the choices (expert
carbon footprint by converting harmful methane decision-making systems, simulation and visualisation
into less harmful carbon dioxide. tools). These are all essential uses for technology
to communicate results and gain buy-in from
Amy Philbrook constituents and stakeholders.
Australian Representative to the International Energy Agency Task 44
— Flexible Bioenergy Suna Taymaz
Market Development Leader US, GHD Digital
The GHD View:
Building SHOCK-resistance to de-risk
It is essential
the transition
to invest in
As we work towards a low-carbon future, the impacts of climate change and the potential for climate
shocks underscore the urgency of accelerating the transition. Increasingly frequent and severe
climate-resilient
weather events, such as heatwaves, storms and flooding, threaten the reliability and resilience of
energy systems.
infrastructure,
To address these challenges, it is essential to invest in climate-resilient infrastructure, adopt
innovative technologies and prioritise energy efficiency. Integrating climate adaptation and
mitigation strategies into policy frameworks will also help safeguard the energy transition from the
adopt innovative
detrimental impacts of climate change.
By proactively addressing climate risks and accelerating the global transition towards a
technologies and
decarbonised, sustainable and resilient energy system, the sector can effectively confront the
pressing challenges of climate change and its associated shocks.
→ Read more: Unlocking waste for a greener future, sooner
prioritise energy
efficiency.
Conclusion: Priorities
A clarion 1 3 5
call
Unlocking money Carefully balancing supply Ensuring a just transition
and markets chains and resources
Ensuring consistent and sufficient capital flows will be The transition will require access to new streams of A de-risked transition is a just transition. Emerging
critical to build resilience into the energy system and raw materials, including critical minerals, and the re- markets that have contributed the least to global
guarding against future shocks. This will require smart tooling of entire supply chains to succeed. This switch warming must be able to access the capital required
By Dr Tej Gidda,
policy and regulatory frameworks that drive returns is a real constraint on the transition and perhaps for the switch to renewables (while balancing
from long-term investment into energy infrastructure, the biggest risk to success. Resilient supply chains other pressing priorities such as health, education
as well as investors recognising that resilient energy are a hallmark of businesses that are well primed to and economic growth). These emerging markets
GHD Global Leader infrastructure is more than an ESG play — it is a smart
business investment. It will also mean directing more
manage the transition and weather the current crisis.
Furthermore, showcasing that your business is resilient
are also predicted to become the world’s largest
energy consumers as the standard of living rises,
— Future Energy capital to early-stage projects and the emerging to shocks and is taking a lead on the transition to underscoring the need for all economies to be
energy tech start-up ecosystem to unlock renewables will help attract perhaps the most finite enabled to transition, if we are to achieve global net-
With almost all of the leaders in our study believing riskier returns. resource of all: talent. Indeed, attracting and (re)skilling zero goals. Fairly sharing the cost of the transition
the current energy crisis is the worst they have ever the workforce of the future — both the next wave of will require important yet difficult intergovernmental
seen, and just under half stating it has decelerated This study shows that a lack of capital is not the graduates and those incumbent in the industry — is a conversations about the transfer of capital, skills,
net-zero plans, energy transition progress is clearly at greatest cause of the global energy crisis; the money key priority for the industry and the wider technology and expertise from the developed to the
risk. Despite the current crisis, it is imperative to ensure is there, but the projects relying on finance to education system. developing world.
decarbonisation is not derailed. We must unwaveringly commence or scale up are currently considered too
commit to utilising the cutting-edge innovation that risky. That puts an immediate emphasis on de-risking A key finding from our research was the need for Managing inequality within countries — to ensure that
typifies our sector to build resilience into the system and the investment profiles of future energy transition future energy systems and supply chains that are the financial burden of the energy transition doesn’t
help it withstand future shocks. projects. To do this, permitting and approvals connected but not dependent on each other, to fall largely on those who can least afford it — will also
processes must be expedited to reduce project lag enable energy movement and trade while, at the same be key to a just transition. Our study shows support
As leaders navigate this era of extreme uncertainty, time and speed up the adoption of new technologies. time, allowing for a greater degree of self-sufficiency. across the industry for a range of national-level
industry, government and the wider energy ecosystem Globally consistent and unifying policy and regulation This calls for country, state — and potentially also, mechanisms, from low interest loans to levies, and
2
should consider five key priorities to de-risk the would also help improve the risk profile of new energy city-level — independence from outside supply. More many energy leaders indicated that they were already
4
transition. Each is critical to accelerating the transition projects in the eyes of investors. resilient, localised energy systems will not only bolster supporting customers in the face of rising inflation
and they must all be executed, in tandem, to help the security, but help overcome the imbalances we see at through energy bill relief. We are not helpless in
world achieve a global net zero. times of energy stress. managing societal pressure; but how these strategies
are employed to ensure no one gets left behind in the
Supercharging engineered Securing community
energy transition will be one of the defining features of
The path ahead

solutions understanding and social
our success (or otherwise) moving forward.
acceptance to succeed
Integrating well-thought-out design principles into
new energy infrastructure and retrofitting existing The transition will require an infrastructure-building
Conclusion: A clarion call

infrastructure will be critical to de-risking the programme the likes of which the sector has never
transition. This will help build resilience, energy seen. It is therefore essential to develop community It’s clear that the energy system is in shock.
efficiency and new product lines that will drive understanding of the need for this infrastructure But, despite our research clearly demonstrating the
forward decarbonisation. As the custodians of and the lifestyle changes required by everyone for severity of the current crisis, SHOCKED gives me
innovation, R&D teams in the world’s top energy it to succeed. This will require engagement at both a hope. While many companies’ net-zero strategies have
companies also have a major role to play in macro level, to build broad acceptance of the need decelerated as a result of the current energy crisis, we
developing new tech to solve the problems faced by to invest in decarbonisation strategies to build long- still see net-zero goals falling between 2040 and 2050
the sector. term resilience, and engagement at a community level across the industry. As with most intractable problems,
where the energy infrastructure essential for transition there is no quick fix; our research only confirms that.
If achieving net-zero — and then net-negative — will be built. But by pulling multiple levers simultaneously, I am
emissions is our north star, then the commitment of hopeful that the great, grand energy transition will
our best engineers, technologists and innovators to A broader public conversation about the energy gather steam and deliver the dramatic change needed
the energy transition is non-negotiable. All avenues transition needs to happen not only quickly, but in this critical decade.
must be explored; from demand-side management consistently and in the most compelling terms
through to sequestering carbon directly from the possible. The sooner we demystify the energy Ultimately, the net-zero transition itself will build
atmosphere (e.g. direct air capture) — and the transition — the burning need, scale and pace of resilience to future shocks. Looking ahead,
multitude of clean energy generation, transmission, change required — the sooner we will de-risk it. decarbonisation will equal energy security — it’s that
distribution and storage solutions in between. As consumers, each of us will ultimately pay for simple. It’s this common, urgent goal to decarbonise that
Improving and optimising existing infrastructure; the transition, so being educated as to the facts of will power the change. Because while the recent shocks
advancing novel engineered and technical the matter — both the significant challenges and to the energy system have been unprecedented, the
approaches; scaling-up clean electricity and enormous opportunities — is imperative to enable sector has demonstrated the motivation, urgency and
low- and zero-carbon fuels; and bringing online individuals to make an informed, deliberate choice to technical know-how to de-risk the transition and play its
long-term, affordable energy storage, must all support projects in their immediate community and critical role in achieving a global net zero.
occur concurrently. the wider government policy decisions that trigger
them at election time.
Through a multifaceted approach
De-risking the
to build a more resilient energy
system and a shared commitment
→
to co-create positive change, we
energy transition
can navigate through this current
period of disruption, stay the
course to net zero emissions and
better prepare ourselves for the
next inevitable shock.
Dr Tej Gidda
Global Leader — Future Energy, GHD
Ultimately, the Authors & Contacts
net-zero transition
will build resilience to
future shocks.
Tej Gidda Marie-France Gravelle
Global Leader Future Energy Lead
— Canada
Looking ahead,
— Future Energy
E [email protected] E [email protected]
P +1 519 884 0510 P +1 514 339 0404
decarbonisation will
equal energy security
Aijaz Hussain Shaik Tom Foley
Global Head of Thought Leadership Future Energy Lead
— it’s that simple.

and Research — EMEA
P +1 972 331 8670 P +44 774 619 283
Sarah FitzGerald Malcolm Rushin

Global Program Lead Future Energy Lead
— Future Energy — Australia
P +61 429 556 135 P +61 405 405 017
Robert Dysiewicz Lucas Blight

Global Commercial Innovation Lead Future Energy Lead
— Future Energy — Asia
P +1 519 340 2387 P +61 408 081 508
Brooke Maki Nick Eldred

Global Strategic Clients & Pursuits Lead Future Energy Lead
— Future Energy — New Zealand
P +61 409 641 535 P +64 27 7467752
Jason Fonti
Global Origination Lead
— Advisory
E [email protected]
P +61 449 232 190
About We’re committed to
GHD
solving the world’s
biggest challenges to
make energy, water and
communities sustainable
for generations to come.
GHD is global professional services company leading

through engineering, design and digital expertise. Our
future-focussed approach delivers extraordinary social,
environmental and economic outcomes and helps us
fulfil our purpose: to deliver lasting community benefit,
together with our clients.
Established in 1928, we remain wholly owned by
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America, and the Pacific region.
Find out more at ghd.com

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A global temperature check

on the energy sector in an

16 01 The security shock

30 03 The climate shock

40 Conclusion: A clarion call

45 Authors & Contacts

1. Global quantitative opinion research

→ Thierry Kalfon, CEO, Renewables Australia & South-East Asia, Engie

Energy sector senior

Regional breakdown: 50 CFOs to gauge the financial impact of the

39% 30% 31%

Total gas capacity

security society climate

Extreme market volatility Societal pressure on the The climate crisis

The crisis has restricted investment:

Integrating well-thought-out design principles into new energy infrastructure

A successful transition will require access to more and new streams of

Energy companies must earn social acceptance for the infrastructure

crisis. Not only did it

disrupt the market

What sets the current resulting supply

crisis apart is the chain disruption

made it very difficult

There’s no quick fix. essential renewable

energy crises were putting many

mainly about access projects on hold.

decarbonisation. Lack of natural gas

CFOs cited upfront high capital costs as the largest barrier to

Impact on 54% Impact on 50%

→ High capital costs

→ Regulatory and policy

The energy transition has are not being deployed

led to the consolidation of quickly enough, as many

enormous pools of private renewable energy projects

At the centre of the current energy crisis is a severe

energy to both electrify

oil, coal or gas, or future

can very quickly cause

growth in energy demand real and growing threat to

fueled by growing energy networks in city cybersecurity, the energy

industry can minimise the risk

populations and rapid environments. Rio de Janeiro

the reliable delivery of critical

78% Lucas Blight Dana Omran

the benefits of technology

are at risk of being

Steps to energy independence

communities and island

nations. Utilities can

drive climate resiliency

across all energy

The energy crisis has

Increasing the mix Boosting reserves Danielle LaCroix

02 The society shock

Every facet of society — from businesses to

Affordable, reliable, lower-

out of sync with the

rest of the world creates

Act (IRA) promotes US