By: Richard Walsh | Forbes Councils Member

Our economy has long thrived on abundant, inexpensive energy. As energy expert Dr. Eric Toone aptly put it, “energy is prosperity.” The correlation between per capita energy consumption and GDP underscores this point. However, the energy landscape is evolving rapidly, and this long-standing dependency may no longer hold true in the near future.

Several factors are driving this shift, including unpredictable weather patterns, the convergence of digital and energy infrastructure, the rise of AI-related energy demand, an aging and complex grid, uncertain federal and state policies, the transition to electric vehicles, global supply chain volatility, geopolitical tensions and tightening capital markets with higher interest rates. This new reality should be a top priority for CEOs, management teams, boards and investment committees—not just as an operational concern but also as a risk to manage and a significant opportunity for differentiation.

Welcome to the “new normal.”

While the energy industry is constantly evolving, this energy transition is unlike any we’ve seen before. NASA reported that 2023 was the warmest year on record, and it saw more severe storms, higher insurance costs, more power outages and less reliable energy. 2024 is on track to surpass these records, with extreme weather affecting large swaths of the population, including a week-plus outage in Houston, a major energy hub of the U.S.

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