TD has acquired Cowen Inc. Please bookmark TD Securities for further updates.

Energy’s Next Transition: Where Traditional Energy Meets Sustainable Energy

By Larry Wieseneck, Co-President of Cowen & Company, LLC, and R. Adam Miller, Managing Director, Sustainability & Energy Innovation, Intrepid Partners

…the global energy sector is gradually shifting away from fossil fuels toward more sustainable sources of energy

Energy Transition for a sustainable future

The recent discourse around Energy Transition often overlooks the fact that energy transition is not a new phenomenon. In fact, through the course of humankind, energy has always been in transition. From the shift of wood burning to coal, and coal to oil, natural gas, nuclear, wind and solar, our sources of energy have never been static. The current and increasing shift from carbon-based oil & gas or “traditional” energy to more sustainable energy is merely the latest phase of our ongoing energy transition.

In our current transition to sustainable energy, conventional thinking often pits the traditional energy industry against new disruptors and emerging technologies — competitors in a zero-sum game.  That view, however, is inaccurate and fails to grasp the sheer scope of innovation required, and the role traditional energy companies will have in the successful proliferation of sustainable energy. Rather, the transition to sustainable energy will be a broad umbrella embracing both disruptors commercializing new technologies and fuel sources, as well as traditional energy companies supporting these disruptors and pursuing their own sustainability ventures. The result is likely to be a symbiosis, bringing both participants into the commercialization of sustainable energy sources

The transition to sustainable energy is a broad initiative and applies to a number of industries and sectors, including next-generation fuels, industrial gases and hydrogen, clean power generation, battery storage, mobility, electric vehicles (EV), advanced materials, carbon capture and storage, industrial and agricultural technologies, and more.  Across these industries, the fundamental objectives are to enhance energy efficiency while lowering or eliminating.  In order to achieve these objectives, the investment in and application of new and disruptive technologies is critical, and the companies within the traditional energy value chain will play a significant role in the process.  Importantly, the transition to sustainable energy will be a continuum rather than a flipped switch—the transition will occur gradually with traditional energy and sustainable energy coexisting in the marketplace for the foreseeable future.

Cowen Traditional Energy & Sustainable Energy Research Coverage

Energy and Innovation within Traditional Energy

As a growing number of countries pledge to reach net-zero emissions by 2050 to combat the threat of climate change, more needs to be done—and the traditional energy industry is playing a leading role.  In its Net Zero by 2050: A Roadmap for the Global Energy Sector report, the International Energy Agency (IEA) cites the need for minimizing emissions from existing oil and gas operations, including reducing methane emissions during operations and electrifying operations using renewable energy whenever possible.  In addition, IEA states, oil and gas companies “may choose to become ‘energy companies’ focused on low-emissions technologies and fuels, including renewable electricity, electricity distribution, EV charging and batteries.”

Notably, many traditional energy companies have already started this process, including BP, Total, Shell, ExxonMobil, Chevron, Occidental, Saudi Aramco, and Valero to name a few. Other companies are allocating capital to and investing in new venture arms to accelerate development of technologies that improve their base operations.  Such ventures reflect what the IEA has described as a “pathway” for pursuing the transition in energy supply, from fossil fuels to renewables and other clean energy sources.

For the legacy players, the transition to cleaner and more efficient operations and new sources of energy may be a major change in strategy, but such shifts are not unprecedented.  The established entities have a long history of technological advancements and capital investment.  It is arguably one of the most innovative industries in terms of ongoing technological and large-scale project developments. Now, as both traditional energy companies and new disruptors turn their sights on renewables and alternative sources of energy, the industry is accelerating its pace of innovation.

Cowen and Intrepid – Differentiated Expertise

As the energy transition continues to unfold, Cowen and its strategic partner, Intrepid Financial Partners are positioned well as strategic advisors and capital providers.  Building on our in-depth expertise in traditional energy, industrials, transportation and mobility, agriculture and technology, we continue to provide expert advice to existing and new clients focused on energy transition and sustainability.  As these trends continue to accelerate, Cowen and Intrepid stand ready as value-add partners of choice, with in-depth understanding of all facets of the future of energy.