2023 review: the themes shaping the year in the energy industry 

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2023 has seen a continued push towards cleaner energies. As 2030 commitments draw closer, it has also represented a period of stabilisation, as the industry worked to steady supplies following the 2022 energy crisis prompted by Russia’s invasion of Ukraine.

GlobalData analysts have tracked the most impactful themes across the year, identifying which ​​​​​​​have influenced the industry’s recent evolution.

Geopolitics was noted as shaping the sector most significantly, as analyst Francesca Gregory explains.  

“Throughout 2023, geopolitics has powerfully shaped the operating environment of the energy sector, with the Russia-Ukraine conflict stoking energy security concerns globally,” she says. “The brewing geopolitical tensions in the Middle East will also see this theme remain front and center of companies’ concerns within the energy sector.  

“While oil prices continue to mirror the geopolitical situation with their volatility, energy developers will be incentivized to continue diversifying their energy supplies in a bid to protect themselves from geopolitical shocks.” 

Many major Asian economies are still primarily reliant on Russia for oil imports, which remains in the top three for oil exports, alongside Saudi Arabia and Canada. Looking to diversify, the EU has reduced its Russian oil imports by 90% in 2023, and gas imports from 155bcm in 2022 to approximately 40-45bcm in 2023. It has also been open with its plans to develop a Mediterranean gas hub, in collaboration with its North African and Eastern Mediterranean partners.

Gregory also cited energy storage as one of the top themes of the year, as the need for storage capacity continues to drive innovation and development in the sector.  

“Global energy storage capacity has been rising rapidly in recent years,” she explains. “2023 has been a monumental year for energy storage projects, with capacity being expected to reach 45.4GW by the end of the year, which will represent an increase of 28.3% from 2022. Batteries currently constitute the bulk of energy storage, accounting for over 80% of current capacity.  

“In part, energy storage has increased with the increasing number of renewable projects, but the importance of this theme has been emphasized by energy security concerns and the ongoing need to regulate renewable intermittency if clean power sources are to consolidate their position in the global energy mix.” 

However, Gregory also warns of the challenges associated with battery production, saying: “Bottlenecks in the supply of critical minerals for batteries such as lithium will continue to pose a challenge to the energy sector, driving increasing investment in mining facilities as well as other forms of energy storage.” 

According to GlobalData energy analyst Andres Reyes, cybersecurity remained high on the agenda this year as technology continued to revolutionize the energy sector. Noting that international oil prices have remained above the average for the last five years, he warns that the integration of digitalisation and energy “comes with significant risks as it creates new access points in industrial networks for hackers to exploit”.

He offers the example of the Colonial Pipeline, which stopped operating for five days after becoming the victim of a ransomware attack in May 2021. Starting in Texas, it is made up of over 5,500 miles of pipeline and supplies almost half of the fuel for the East Coast. The attack caused a loss of around $2.1m in ransom.

“Consequently, cyber defenses in the sector are now growing due to the critical national significance of its infrastructure,” Reyes says. “Currently, major oil and gas companies adopting cybersecurity include Exxon Mobil Corp, Baker Hughes, Tullow Oil, Equinor, and Repsol.  

“Furthermore, GlobalData forecasts the cybersecurity revenues in energy to reach slightly about $9bn by 2024, a 9.1% increase compared to 2023.” 

Reyes also highlighted liquefied natural gas (LNG) as a key theme of the past year. Data collected by Refinitiv Eikon showed that Europe’s LNG imports exceeded natural gas pipeline imports for the first time. This follows an 18% reduction in natural gas consumption from August 2022 to March 2023 in Europe (compared with the previous five-year average over the same months), caused by the reduction in pipeline imports from Russia.  

Reyes explains the global trend: “During the first three quarters of 2023, following the Russia-Ukraine conflict, global gas markets rebalanced gradually due to a decreased demand in European and mature Asia-Pacific countries, driven primarily by an accelerated deployment of renewables. Furthermore, the LNG market prices, which remain above historical values, were reduced by about 60-70% in both continents compared to Q1-Q3 2022.  

“Due to the Israel-Palestine conflict in Q4 2023, some LNG buyers in North Asia paused plans to acquire fuel for winter. In turn, this represented a risk in supply, boosting the LNG Asian Spot prices to the highest level in the last eight months.” 

Disruption in the energy industry has been prompted by shifts in the geopolitical scene, and by the emergence of new digital threats. These promise to continue to drive change into 2024, as the sector works to adapt to fluctuations, whilst the growing markets presented by energy storage and LNG will open new avenues for future investment.