The Rapid Acceleration of Energy Convergence

Energy convergence is a rapidly growing macro trend within the Energy Sector. What is “energy convergence”? Historically, the vast majority of our energy needs have been supplied by hydrocarbons (e.g. oil & gas and coal). Now, and as we move forward, there is an accelerated shift to a more assorted supply of energy sources (e.g. solar, wind, and geothermal to name a few). As a result, businesses are focused on merging traditional forms of energy sources and business models with clean energy sources and new business strategies. The energy convergence trend at its core is centered on the global initiative to lower carbon emissions. Many businesses are participating in the energy convergence trend in an effort to (i) make energy more sustainable and affordable, (ii) appease investor and consumer demand for cleaner energy, (iii) ease geopolitical instability as countries compete for scarce resources and (iv) participate in emerging markets with potentially attractive new revenue stream opportunities. While many energy experts have been predicting this convergence for a number of years, most did not anticipate the rapid pace at which it is occurring.

Companies in the Energy Sector around the world are participating in the energy convergence trend in a number of ways, but perhaps the two most obvious examples are:

Traditional energy companies are allocating significant capital and making meaningful investments in renewables companies and/or lower carbon emitting businesses, all in an effort to reduce their carbon emissions. Additionally, traditional energy companies and financial investors view the global initiative to reduce carbon emissions as an opportunity to invest in new and emerging markets where the business models of traditional energy companies will position them well to make investments in related, lower carbon emitting businesses.
Traditional energy companies are changing their business models. With the addition of non-traditional investments, traditional energy companies have discovered that the historical long-range planning, capital investments and business plans of the past do not work for the more diverse energy supplies of today. Companies are attempting to process large volumes of data to help them understand how best to adjust their business planning. A result of this is the emergence of a number of joint ventures between traditional energy companies and renewable energy companies, thereby allowing traditional energy companies with the benefit of business practices and knowledge of renewables businesses.

There has never been a more exciting time within the Energy Sector. What is emerging is a diverse energy system where traditional hydrocarbons will continue to play a significant role, but with an accelerated emphasis on “clean” energy supplies. It is impossible to ignore the sector’s increase in participation in energy convergence efforts, and Foley & Lardner LLP has the broad range of legal expertise and experience needed to help facilitate your needs to further your energy convergence efforts, or assist you in entering this dynamic market for the first time.

Disclaimer

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.