10 Facts:

An Introduction to
Energy Transition
As energy transition takes off, access to new
competitive clean-energy alternatives will accelerate.
Businesses and Energy security Energy
governments that Providing safe and reliable costs
want to capitalize supply of energy to all,
including the poorest
Enabling
acceptable
on the opportunities energy costs
will need to navigate to foster
economic
a rapidly changing growth

energy landscape
shaped by four key
Social
dimensions: acceptance Climate change
Deploying energy Developing sustainable
solutions that are low carbon solutions
accepted by the suitable in a carbon
civil society constrained world
Source: A.T. Kearney Energy Transition Institute
 1. Decoupling greenhouse gas emissions from
economic growth is improving at only 1% per year.
Securing economic growth and energy efficiency will
require innovative new approaches.
Global Primary Energy Consumption per GDP
0.4
kg of oil equivalent/GDP$

0.3 –0.9%

0.2

0.1

0.0
1960 1970 1980 1990 2000 2010 2020

Notes: GDP in constant USD2014; Energy refers to total primary energy demand; CO2 refers to energy-related CO2 emissions
Source: BP (2015) “Statistical review”; World Bank (2015) GDP data; A.T. Kearney Energy Transition Institute
2. Energy use has a major
impact on our climate—
accounting for two-thirds

2/3
of global greenhouse
gas emissions.1
Forward-thinking businesses
and governments are investing
in solutions that use less energy,
reduce costs, and make it easier
for consumers to make the Remaining 1/3
from forestry/agriculture/waste (25%)
transition. and other industrial emissions (9%)

Source: IEA, CO2 Emissions from Fuel Combustion Highlights 2016; A.T. Kearney Energy Transition Institute
1 Including CO2 (90%), CH4 (9%), N2O (1%)
3. Switching from coal Natural gas supply (years)
to gas could reduce
the world’s CO2
emissions by 20% 233
Technically recoverable
With more than 200 resources
years of gas reserves,
utilities and oil and 58
gas companies have Proved reserves
a wealth of growth
(according to OPEC)

opportunities. 20
Proved
reserves 1
(according to RYSTAD) Annual
production
Sources: IEA, World Energy Outlook 2013; OPEC Annual Statistical Bulletin 2014,
Rystad Energy; A.T. Kearney Energy Transition Institute
4. Carbon capture and
storage is essential
to keep global warming
from rising above the
2°C threshold, but it
requires robust carbon
pricing mechanisms or
direct public financial
support to compensate CO2
for the immediate high
upfront investments
that are needed.
Source: A.T. Kearney Energy Transition Institute
5. With major automakers introducing new
models, the global fleet of electric vehicles
could see massive growth.
2030
However, this will still only
be about 10 percent of the
world’s vehicles. Improving
fuel engine efficiency
will remain a priority
for our climate for

140
years to come. 2015

+1 million
million
Sources: EA Energy Technology Perspectives 2016 (2DS scenario); A.T. Kearney Energy Transition Institute
6. Onshore wind and solar PV are the cheapest
electricity sources in favorable locations,
offering attractive investment opportunities
and accelerating the energy transition.
Production
costs/kWh

1970s 2017

Sources: IRENA (2015), “Renewable Power Generation Costs in 2014”; A.T. Kearney Energy Transition Institute
Note: kWh is kilowatt hour.
7. Up to 20% of electricity is lost during
transmission and distribution.
Smart-grid technologies can recover most of these
losses and reduce CO2 emissions by up to 4 percent
in the next 10 to 15 years.

Gener- Trans- Distri- Consump-

ation mission bution tion

Sources: The World Bank, "Electric power transmission and distribution losses, 2011 dataset"; IEA (2012), “ETP 2012”; A.T. Kearney Energy Transition Institute
8. The global energy transition is being led by
new technologies and drastic drops in the cost
of electricity storage needed to cope with fluctu-
ations in renewable power generation. With the
exception of pumped-storage hydroelectricity,
electricity storage is at an embryonic stage.

Current split of electricity storage

0.7%
98% battery storage

Pumped 1.3%
other1
hydro storage
Sources: BNEF database (November 2015); IRENA database (November 2015); A.T. Kearney Energy Transition Institute
1 Includes thermal; flywheel, hydrogen, and CAES (compressed air energy systems)
9. The energy industry
uses 15% of the world’s
supply of fresh water.
Meanwhile, two-thirds
of the world’s population
faces a water shortage.
Solar and wind power
improves energy security
while also alleviating the
water shortage in water-
stressed regions.
Sources: IEA (2012), “World Energy Outlook 2012 – Chapter 17 Water for Energy”; A.T. Kearney Energy Transition Institute
Note: calculated using mean data from Meldrum, et al. (2013)
10. If we used all of the world’s coal, oil, and
gas reserves, we would exceed the CO2
threshold to limit global warming below
2°C three times over.
Forward-thinking oil and 1,900
gas companies are already
considering ways to
GtCO2
C02 emitted
optimize their portfolios (1870–2011)
to avoid stranded assets 1,000
and are pursuing GtCO2
C02 budget remaining
opportunities in gas in the 21st century
and renewable energy.
Sources: IPCC (2015) “AR5, Synthesis Report”; A.T. Kearney Energy Transition Institute
For more insights on global trends
in energy transition, technologies, and
strategic implications for your business
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