Grigory Vygon participated in the session "Alternative Energies – Is the Golden Era of Hydrocarbons a Thing of the Past?” at the 20-th SPIEF’16

VYGON Consulting managing director Grigory Vygon took part in the discussion panel "Alternative Energies – Is the Golden Era of Hydrocarbons a Thing of the Past?” at the 20-th St. Petersburg International Economic Forum (SPIEF’16).

For a long time the world's energy balance structure was comprised of oil, gas and coal by more than 80%. However, high energy prices through 2014, as well as technological progress contributed to rising alternative energy technologies throughput. The future global energy mix, oil and gas markets uncertainties and instability, affecting alternative energy footprint, were the main issues discussed during the panel.

As Grigory mentioned, today oil demand is annually increasing by about 1-1,2 mbd, however this trend might reverse. US and Europe, the most saturated markets, have seen no population growth, extensive alternative energy production incentives, green car proliferation, while energy consumption decline might soon speed up. Besides, we have already witnessed rapid technological growth, mass PEV deployment. PEV prices are getting closer to the ICE vehicle price, thus once electric vehicle becomes more affordable in the mass market, whether it would take 5 years or some more, during the next 10-15 years the world could change fundamentally, Vygon believes.

Global majors, such as Exxon, BP, Shell, actively invest in renewables, understanding the transformations of the consumption pattern. Despite the feasible demand reduction, they assume growing natural gas consumption and are ready to shift from one type of hydrocarbon (oil) to another (gas), Vygon notes. Furthermore, he suggests that in the case of technological development of solar electricity generation and electricity storage, the largest Oil & Gas companies would redesign their traditional activity into generating electricity from RES.

Strong dependence on hydrocarbon resources is a stumbling block for Russia, as well as technological backlog and even more important, as Vygon stressed, is that “we do not consider possible scenarios of technological breakthrough, which could reshape the global energy mix.”