safeguard national energy security. The shift in
production from centralised generation to an
optimal combination of centralised and distributed energy improves efficiency and encourages the development and use of clean energy.
Technology advances are reflected in the development and deployment of the Energy Internet
(Internet +). Internet + is a combination of
complementary energy sources in an optimised
mix of centralised grids and distributed energy
networks that is low carbon and intelligent. With
support from Energy Internet technologies,
demand response becomes a crucial forcing
mechanism to accelerate supply-side change and
improve energy management. In the Recommended scenario, China’s energy imports will
continue to rise in the short term, but as renewable energy and nuclear power advance, China’s
dependency on energy imports will fall.
(2) The energy revolution drives change in the
energy system and guides development of the
energy industry. As coal will continue to dominate China’s short-term energy mix, low-carbon
energy and clean coal should be the focus in the
near future. The oil and gas sector will concentrate on innovating greener technologies and
accelerating the exploitation of unconventional
resources. China will make vigorous efforts to
drive the development of clean energy. It will
invest more in technology innovation to lower
costs and improve energy efficiency. Power
conversion will be cost-efficient, clean and green.
It will replace fossil fuels with clean energy and
increase the amount of electricity in end-use
consumption.
(3) The energy revolution drives the energy
industry to invest in clean energy and the cleaner
use of fossil fuels. To deliver the energy strategy
of a diversified supply system, the participation
of various types of investor is needed.
(4) The energy revolution will make the
structural imbalances in the labour market more
severe. There will be more job opportunities for
highly skilled people, but rising unemployment
for those in the conventional energy sector. This
applies to those regions and provinces that rely
on conventional energy, less so on those developing new energy sectors. It may force some
provinces to carry out an energy transition and
reduce their dependence on conventional energy.
So doing would spur their economy, ease
unemployment and make for healthier and more
stable development.
2 Precedents and Prospects
of International Energy
Revolutions
2.1 Energy Companies in Transition
—Responses to Future
Trends
2.1.1 Introduction
Strategies and organisational structures within
the oil and gas industry are the result of historical
market conditions that are likely to change over
the coming decade. Oil and gas markets have
traditionally been characterised by rising demand
and prices. This has led companies to focus on
megaprojects that require intense coordination.
As a result, pyramid organisational structures
with multiple levels of oversight have become
the industry norm. However, the oil and gas
industry faces large structural shifts that can
affect its organisational and strategic structures in
the future.
Specifically, two trends are likely to trigger
change. First, structurally lower oil and gas prices
are becoming increasingly likely. This is due to a
combination of technology and policy that increases supply and reduces demand. Supply is increasing as horizontal drilling and hydraulic fracturing
techniques are diffused and climate policies—together with energy efficiency improvements—
curb demand. Second, technology disruptions in
energy markets are becoming more likely. Digitalisation and innovations in decarbonisation will
increasingly change how energy is produced and
consumed, which will ultimately lead to changes in
existing markets.
Oil and gas companies have already begun to
adjust their strategies and organisational structures. The industry is currently characterised by
two strategic themes. First, oil and gas companies, including Equinor, Total and Shell, have
Special Report 1: A Study of China’s Energy Supply Revolution
49
production from centralised generation to an
optimal combination of centralised and distributed energy improves efficiency and encourages the development and use of clean energy.
Technology advances are reflected in the development and deployment of the Energy Internet
(Internet +). Internet + is a combination of
complementary energy sources in an optimised
mix of centralised grids and distributed energy
networks that is low carbon and intelligent. With
support from Energy Internet technologies,
demand response becomes a crucial forcing
mechanism to accelerate supply-side change and
improve energy management. In the Recommended scenario, China’s energy imports will
continue to rise in the short term, but as renewable energy and nuclear power advance, China’s
dependency on energy imports will fall.
(2) The energy revolution drives change in the
energy system and guides development of the
energy industry. As coal will continue to dominate China’s short-term energy mix, low-carbon
energy and clean coal should be the focus in the
near future. The oil and gas sector will concentrate on innovating greener technologies and
accelerating the exploitation of unconventional
resources. China will make vigorous efforts to
drive the development of clean energy. It will
invest more in technology innovation to lower
costs and improve energy efficiency. Power
conversion will be cost-efficient, clean and green.
It will replace fossil fuels with clean energy and
increase the amount of electricity in end-use
consumption.
(3) The energy revolution drives the energy
industry to invest in clean energy and the cleaner
use of fossil fuels. To deliver the energy strategy
of a diversified supply system, the participation
of various types of investor is needed.
(4) The energy revolution will make the
structural imbalances in the labour market more
severe. There will be more job opportunities for
highly skilled people, but rising unemployment
for those in the conventional energy sector. This
applies to those regions and provinces that rely
on conventional energy, less so on those developing new energy sectors. It may force some
provinces to carry out an energy transition and
reduce their dependence on conventional energy.
So doing would spur their economy, ease
unemployment and make for healthier and more
stable development.
2 Precedents and Prospects
of International Energy
Revolutions
2.1 Energy Companies in Transition
—Responses to Future
Trends
2.1.1 Introduction
Strategies and organisational structures within
the oil and gas industry are the result of historical
market conditions that are likely to change over
the coming decade. Oil and gas markets have
traditionally been characterised by rising demand
and prices. This has led companies to focus on
megaprojects that require intense coordination.
As a result, pyramid organisational structures
with multiple levels of oversight have become
the industry norm. However, the oil and gas
industry faces large structural shifts that can
affect its organisational and strategic structures in
the future.
Specifically, two trends are likely to trigger
change. First, structurally lower oil and gas prices
are becoming increasingly likely. This is due to a
combination of technology and policy that increases supply and reduces demand. Supply is increasing as horizontal drilling and hydraulic fracturing
techniques are diffused and climate policies—together with energy efficiency improvements—
curb demand. Second, technology disruptions in
energy markets are becoming more likely. Digitalisation and innovations in decarbonisation will
increasingly change how energy is produced and
consumed, which will ultimately lead to changes in
existing markets.
Oil and gas companies have already begun to
adjust their strategies and organisational structures. The industry is currently characterised by
two strategic themes. First, oil and gas companies, including Equinor, Total and Shell, have
Special Report 1: A Study of China’s Energy Supply Revolution
49