Rapid advances in smart technologies are transforming the energy sector and will deliver major benefits to the global economy, a new report has found.

The research, published by analysts at the McKinsey Global Institute (MGI) on 16 February, said that the adoption of these new technologies could unlock savings of between $900bn-$1.6tn by 2035.

At least two-thirds of this total value is derived from reduced demand for energy as a result of greater energy productivity, while the remaining third comes from productivity savings captured by resource producers. Reduced energy demand from transportation, the proliferation of energy efficiency measures, and increased substitution of fossil fuels enabled by cost reductions in renewables could account for as much as $1.2tn of the total savings, it said.

MGI also predicted that companies which focus on the fundamentals—increasing throughput and driving down capital costs, spending, and labour costs—and look for opportunities in technology-driven areas “may have an advantage.”

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