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Impact of the Russo-Ukrainian War on the Global Power & Energy Industry

  • Report
  • 63 Pages
  • December 2022
  • Region: Global
  • Frost & Sullivan
  • ID: 5709871

Disruption Accelerates Investment and Drives Innovation

Russia’s invasion of Ukraine has caused significant disruption to global energy markets. Europe has felt the biggest impact as a significant buyer of oil, and particularly gas, from Russia. In fact, Russia accounted for 35.5% of Europe’s gas supply in 2021. As the volume of gas coming from Russia has fallen, Europe has been scrambling to secure supplies on the wider global market. This has boosted the fortunes of liquid natural gas (LNG) suppliers such as Australia, Qatar, and the United States, all of whom have seen revenues increase substantially, which has boosted the business case for further investment in liquefaction terminals in these countries to increase exports. In Europe, countries have boosted investment in LNG regasification terminals, with demand for floating terminals, which can be brought online very fast.

Even before the invasion, investment in renewable energy was forecast to be high, but the invasion has led a number of countries to increase their spending. In fact, the European Union has mandated the acceleration of renewable energy. China and India have both increased their renewable investment programs. Southeast Asian countries that had plans to make gas a significant part of their energy mix are now reconsidering this strategy and focusing more on renewable energy. In the United States, passage of the Inflation Reduction Act, which is essentially a support package for renewable energy, will lead to significantly higher investment (this could well have occurred even if the invasion had not happened). These increases in renewable investment will also boost investment in grid technologies such as transformers, switchgear, and technologies that facilitate renewable energy coming online.

Nuclear is another low-carbon power source that has also seen accelerated investment activity since the invasion. A number of European countries that were going to close plants in the coming years have either decided to extend the lifetime of plants or will likely do so in 2023. In Eastern Europe countries such as Poland, whose plans for nuclear plants were slowly progressing for some years, have now accelerated them, with contracts being awarded. In the longer term, coal must decline because of its emission levels, and incentive programs are increasingly offered to less developed economies to enable earlier closures. However, the invasion is likely to see more coal plants remain online for longer, as countries are concerned about supply security.

This study focuses on the main implications of the Russo-Ukrainian War in core global regions for the most important sectors within the energy industry, including oil and gas, coal, nuclear, renewable energy, digital grids, and energy storage. The forecast period is 2023-2030 using the base year of 2022.

Table of Contents

1. Strategic Imperatives

  • Why is it Increasingly Difficult to Grow?
  • The Strategic Imperative 8™
  • The Impact of the Top 3 Strategic Imperatives on the Global Power & Energy Industry
  • Growth Opportunities Fuel the Growth Pipeline Engine™

2. Growth Opportunity Analysis

  • Main Findings
  • Implications for the Oil and Gas Industry
  • Implications for the Power Industry
  • Implications for Commercial and Industrial (C&I) Customers
  • Scope of Analysis

3. Europe’s Energy Crisis: Background

  • Europe’s Energy Crisis: a Significant Gas Supply Deficit
  • Europe’s Energy Crisis: High Historical Dependence on Russia
  • Europe’s Energy Crisis: LNG Largely Under-utilized Pre-War
  • Europe’s Energy Crisis: Soaring Electricity Prices

4. Implications for the Global Power & Energy Markets

  • Growth Drivers
  • Growth Restraints
  • Implications of the Impact of the Russo-Ukrainian War on the Global Power & Energy Industry
  •  Reduction in Energy Demand
  • Rebalancing the Global Supply: European Domination of the Short-term LNG Market
  • Rebalancing Global Supply: Strong Investment Growth and Acceleration
  • Increased Gas Storage: the Result of Aggressive European Action
  • Acceleration of Renewables: Global Forecast Increases
  • Acceleration of Renewables: the Russo-Ukrainian War's Impact
  • Acceleration of Renewables: Sharp European Forecast Increases
  • Acceleration of Renewables: Can Europe Solve its Permit Challenge?
  • Short-term Lifeline for Coal Power: Decommissioning Delays in 2022-23
  • Short-term Lifeline for Coal Power: Western Europe Keeping Plants Online
  • Short-term Lifeline for Coal Power: Eastern Europe Remains Committed to Coal
  • Nuclear Re-think: Supply Security Paramount
  • Nuclear Re-think: Status in Europe
  • Importance of Grid Resiliency and Intelligence: Decentralized Solar Growth
  • Importance of Grid Resiliency and Intelligence: Double-digit Growth for Digital Grid Solutions
  • Importance of Grid Resiliency and Intelligence: Soaring Battery Energy Storage Capacity
  • Increasing Focus on Cybersecurity

5. Regional Implications

  • The Russo-Ukrainian War’s Impact on Energy in Europe
  • The Russo-Ukrainian War’s Impact on North America
  • The Russo-Ukrainian War’s Impact on Latin America
  • The Russo-Ukrainian War’s Impact on the Middle East
  • The Russo-Ukrainian War’s Impact on China
  • The Russo-Ukrainian War’s Impact on India and the Rest of South Asia
  • The Russo-Ukrainian War’s Impact on APAC
  • The Russo-Ukrainian War’s Impact on Africa

6. Growth Opportunity Universe

  • Growth Opportunity 1: Expanding Current Solution Offerings: New Opportunities for System Integrators and Installers
  • Growth Opportunity 2: Consumer to Prosumer: New Opportunities for End Users
  • Growth Opportunity 3: Distributed Cybersecurity for Grid Reliability 
  • List of Exhibits
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