2025-energy-security-scenarios

The focus of the world is highlighted by the rising energy prices in 2023, particularly in Europe. The advent of ChatGPT signals a new wave of artificial intelligence (AI) awareness.
To address the implications of AI on the energy system, scenario analysis is employed at Shell, helping to explore and understand various possible futures.

Scenarios provide insights into energy systems, technology, geopolitical and social trends.
Shell utilizes scenarios to assist senior management in considering long-term challenges and influences on company strategy.
Scenarios are constructed using data and expert insights, not strategies or business plans of Shell.

Impact on Energy Supply Chain: AI is projected to accelerate production processes across modules (e.g., solar panels, batteries), enhancing efficiency and complexity.
Autonomous Vehicles: Implementation of autonomy in vehicles could lead to significant efficiency gains and boost electric vehicle (EV) adoption.
Demand Management: AI will aid in balanced energy management, promoting renewable systems and battery storage solutions.
Infrastructure Development: New AI tools could streamline management of large energy projects.

Recognition of global tensions post the Ukraine invasion.
Trade friction affects the energy transition but societal pressure for climate action persists.
Outcome: Balancing self-interest with sustainability, resulting in slow climate action and emissions peaking in the 2020s.

Represents a normative approach for achieving net-zero by 2050 and limiting warming to <1.5°C.
Requires drastic policy frameworks and citizen action pushing for rapid energy transition and sustainable practices.

Characterized by robust growth driven by AI, enhancing productivity and energy demand.
Global competitive pressures drive increased energy efficiency while altering the geopolitical landscape.
Outcome: Eventually reaches net-zero emissions by 2080 but struggles with maintaining emissions goals along the way.

Growing demand for energy services correlating with global population growth and rising living standards.
Anticipated 25% growth in primary energy demand by 2050 influenced by economic growth and electrification rates.
Continued oil and gas demand projected into the coming decades, yet transitioning to low-carbon alternatives remains crucial.
Potential for significant investment in oil and gas production despite shifts towards renewables.

Electrification: Accelerated electrification expected in all sectors leads to substantial growth in electric vehicle sales.
Renewables: Persistent growth of solar and wind energies integrated with energy storage solutions.
Nuclear Growth: Potential renaissance for nuclear energy emphasized through small modular reactors (SMRs).

Strategies to achieve net-zero emissions reflect varying capabilities across scenarios.
Carbon Capture and Storage (CCS) technology plays a vital role across all scenarios, with Horizon emphasizing early integration and aggressive policies.
The significance of land management, including forest preservation and reforestation, emerges as essential for effective carbon management.

Shell's scenarios highlight critical challenges and opportunities facing the energy transition.
Outcomes hinge significantly on societies' capacities for technological adoption, policy implementation, and collaborative approaches towards a sustainable future.
Understanding technological and societal shifts will be key to navigating the forthcoming energy landscape.