The aftermath of the Covid-19 pandemic spurred a push towards enhanced energy efficiency and decarbonisation. However, the Russia-Ukraine conflict subsequently raised political awareness regarding the importance of energy security, leading to a recalibration of the rush towards renewable energy in the short to medium term.
For instance, the UK Government has recently acknowledged that delivering decarbonisation on a huge scale needs to be done over a realistic timescale and at a cost that the population can afford. The UK is not an outlier. In the US, although the Biden administration is at the forefront of the global green agenda, the country also operates the largest civil nuclear fleet in the world, producing 30 per cent of the world’s nuclear electricity. The reactors need to be maintained to avoid obsolescence and provide a reliable source of electricity during the green transition. It’s worth noting that almost all the 1GW plus new build nuclear reactor opportunities are in Asia, with the exception of the limited UK programme.
The unprecedented levels of volatility in the energy market since the start of the conflict in Ukraine, and the need for Europe to replace Russian hydrocarbons, is underpinning demand for oil and gas services in the aftermarket and for new equipment, too.