New Economic Reality: Rising Energy Pressures

July 2023

The global energy crisis has had far-reaching implications for consumers, businesses and entire economies, highlighting the importance of the global energy transition and boosting energy efficiency, while creating opportunities for innovation and investments in renewables and green technologies. Timely and effective business strategy adjustments and contingency plans are key to cope with energy price fluctuations and cost pressures, and to address the changing consumer behaviour.

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Key Findings

Energy pressures rise on growing consumption, limited supply and intensifying regulations

High demand, limited supply, climate change and regulatory changes are all driving up energy pressures for economies, businesses and consumers. Energy demand is rising rapidly in developing countries, outpacing supply growth, while infrastructure constraints, high reliance on fossil fuels and low investment add extra pressure. While developed countries are under pressure to phase out fossil fuels, better access to green technologies offers opportunities to boost resilience.

African, Asian and European countries are highly vulnerable to energy market shocks

Euromonitor’s Global Energy Vulnerability Index shows countries most susceptible to energy market risks due to poor energy resources, high imports reliance, and struggles to attract financing. While low self-sufficiency raises the exposure of European and many Asian economies, sub-Saharan Africa continues to struggle with a wide gap in energy access and underinvestment. Assessing market vulnerability is key to identify potential areas for growth, adaptation and innovation.

Diversification of energy sources, energy efficiency, and small-scale solutions help to boost business resilience

Energy intensive industries, such as chemicals, minerals, metals or packaging face the highest risks from energy market shocks. Production disruptions in these industries may have ripple effects on global supply chains and the economy. While the energy crisis has encouraged firms towards investing in renewables and energy-efficient equipment, small-scale changes also provide opportunities to reduce costs and improve business resilience and profit margins.

By tackling affordability and sustainability pressures, businesses can tap into a wider client pool and boost brand loyalty

Rising energy prices and the subsequent cost-of-living crisis disproportionately affect low-income earners, raising price sensitivity and awareness about energy efficiency. Consumers in Europe and Latin America are most susceptible to rising energy pressures. While minding the importance of affordability, there are opportunities for companies to become consumers’ partners in the journey to energy efficiency, spending optimisation and sustainability.

Key takeaways
Key drivers of energy supply and prices pressures
Energy pressures rise on growing demand, infrastructure limitations and changing regulations
Transition to renewable energy accelerates, but more investments are needed
Immediate energy crisis subsided, yet multiple risks and challenges persist
Global Energy Vulnerability Index helps to assess energy security across markets
African, Asian and European economies are more vulnerable to rising energy pressures
Europe’s efforts to enhance long-term security offer vast opportunities for businesses
The US to gain from clean energy expansion; Australia resilient despite falling coal exports
Export reliance raises risks for Middle East; Latin America struggles with insufficient funding
Surging demand in Asia and Africa opens opportunities for investment and innovation
Energy shocks hit economic growth and inflation in energy-vulnerable economies harder
Case Study: ArcelorMittal will use state aid to build two hydrogen-powered steel plants
Case Study: M-Kopa to expand off-grid solar energy financing to clients in sub-Saharan Africa
Strategies to build energy resilience in vulnerable markets
Volatility in the energy markets puts pressure on companies’ profits
Manufacturing sectors most vulnerable due to high gas and electricity intensity
Soaring costs and weak demand put further pressures on energy-intensive industries
Disruptions in energy-intensive industries would spill over across the broader economy
Relocation and green energy are growing solutions for vulnerable industries
Companies can boost small-scale energy-saving measures to enhance efficiency
Case Study: CLAAS focuses on energy efficiency amid supply disruptions
Strategies for companies to cope with energy uncertainty
Consumers in Europe and Latin America are most susceptible to energy price fluctuations
European households have been hit hardest by the recent energy crunch
High energy costs affect poorer households harder
Businesses becoming partners in the journey to energy efficiency
Case Study: Iceland teams up with Utilita to help clients identify efficient cooking methods
Strategies to address consumers’ price sensitivity and sustainability awareness
Key takeaways
Rising energy pressures: How to build resilience and win
Global demand for energy by 2030: What to expect
Global Energy Vulnerability Index 2023 Ranking
Key pillars and indicators to assess economies’ vulnerability to energy pressures


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