These Are the Biggest Risks Facing the Energy Sector Today

In an ever-evolving world, things like technology, retaining top talent, and freak natural disasters can all pose a significant risk for energy companies across the globe. 

Unfortunately, there’s no way to stop these risks from happening. 

However, companies can arm themselves with the tools and knowledge they need to face these critical issues and diminish the chance of their site metaphorically (and, sometimes, physically) falling apart. 

This is important, as the energy sector is a key part of every other industry. 

Households, businesses, governments, transportation, and everything in between all rely on a solid energy supply, which makes it vital for companies to be proactive in assessing and responding to risks. 

Here are some of the most pressing risks to watch out for in the next few years. 

The Changing Nature of Power Generation 

Earth’s atmosphere is constantly changing, which means the energy industry constantly has to adapt and come up with new ways to generate energy that aligns with tighter regulations and environmental issues. 

80% of the world’s energy comes from fossil fuels, but that’s decreasing every year as other generation methods - like wind power and solar power - become more popular. 

A report from the US Energy Information Administration found that electric power consumption of fossil fuels is at the lowest it has been in 25 years. 

The shift towards natural gas generation means that the energy sector will have to adapt and expand to new ways of thinking. 

Cyber Threats

Like many other sectors, the energy industry is finding its feet in the new digital landscape. 

In fact, around $52 billion is being spent each year to modernize grids and take the industry from mechanical to digital.

While this will help speed up processes and create a more efficient industry as a whole, it also opens energy companies up to cyber threats. 

The energy world is often targeted more than other sectors because it impacts individuals as well as large companies. 

Securing and Keeping Talented Employees

The energy world faces being left in the dark in favor of new, more exciting industries that have cropped up thanks to the digital revolution. 

This means it’s increasingly difficult for companies to attract top talent in the industry and, more importantly, get them to stick around for the long haul. 

According to research, almost 50% of the workforce in the energy sector will reach retirement age in less than a decade, leaving a gaping hole in the number of talented, knowledgeable, and experienced workers on hand. 

This is put down to a lack of training and inadequately skilled workers in an innovative and constantly-pivoting industry, as well as vicious competition in an ever-decreasing talent pool. 

However, we might see this change as immersive technologies begin to catch on, creating more training opportunities for the digital generation. 

Catastrophic Events

There’s one thing the energy industry is always at the mercy of: Mother Nature. 

But it’s not just malicious weather and natural disasters that pose a problem for the sector. Today, events like terrorist activities and mass cyber attacks can drastically affect a facility and even shut it down for good. 

Some experts predict that we’ll see more of these catastrophic events taking place in the future as digitalization makes it easier and the dollars involved become that much greater. 

But, with new technologies emerging by the day, the industry will soon be able to learn from past events and cut recovery time down to almost nothing. 

Contingency planning is key here.

As long as you know what risks you’re up against, you can start putting provisions in place to avoid those that you can and face others head-on so you can get back up and running in no time at all. 

Learn more about contingency planning

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