ENR executives concerned about energy transition projects’ economic viability

The majority of APAC executives, however, are optimistic about the projects’ contribution.

Executives from the energy and natural resources (ENR) sector remain concerned about the financial viability of energy transition projects as they are worried that they will have enough customers willing to pay higher prices.

In a report, Bain & Company noted that this is the major concern amongst executives with 70% identifying encouraging customers to make sufficient return on their investment, up by 14 percentage points in 2022.

“In our view, the direct impact of higher interest rates on the cost of transition projects is one of the most important stories of 2023 and is likely shaping executives’ perspective on this issue,” the report read.

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Aside from this, 54% also consider barriers the government policy and regulators, whilst 30% cited a lack of organisational capability for scaling at speed and supply chain constraints.

Meanwhile, taxes and carbon pricing, and government subsidies were touted as top influences on customer behaviour.

Despite this, most of the executives are in the Middle East (61%), Asia Pacific (55%), and Latin America (51%) are optimistic about the contributions of transition-oriented businesses to their valuation and profits by 2030.