By the final panel of the Financial Times’ Energy Transformation Strategies summit in London, U.K. earlier this month, the conclusion was clear: energy companies have to prepare for a future of abundant renewable energy and disruptive technology.

The summit was sponsored by PricewaterhouseCoopers (PWC), one of the world's largest accountancy and professional services firms, and financial NGO Carbon Tracker. Bringing together leading energy economists from the International Energy Agency, industry experts and investors, the summit tackled tough questions on the brave new energy world.

The winners in the transition will be renewable energy companies, hydrocarbon companies that adapt their business model to changing energy systems, and low-cost oil producers who can continue to pump oil at profit even when prices are low.

International energy industry leaders are already taking action to shift their businesses away from fossil fuels. In May, French oil major Total acquired energy storage company Saft Groupe, and global utility company Engie picked up Green Charge Networks, a California-based battery maker. Italian energy major Enel is now betting on a renewable energy-driven future. Lower cost oil producers are publicly turning on high cost tar sands and heavy oil competitors in Canada and Venezuela.

In the game of supply and demand, low cost oil producers are happy to see their higher-cost competitors go out of business, accelerating the market transition away from high-cost, high-carbon fossil fuels. Coal was the first fossil fuel peer to be thrown under the bus, with oil majors suggesting that the future energy mix would be natural gas and low-cost sweet crude.

High-cost oil sands could be the next casualty as investors shift their focus away from hydrocarbons.

Scott Sheffield of Pioneer Natural Resources stressed to the summit audience that as the slump in oil prices continues and competition from renewables increases, lower cost producers — particularly those in the Permian Basin in western Texas — are happy to see tarsands oil producers go bankrupt sooner rather than later. Even PWC, accountants to the world’s largest oil companies, warned the audience that oil could be facing a tipping point similar to the U.S. coal industry, which is in structural decline.

The investment case for renewables will only get better

Subsidy reform will only accelerate these trends. Global fossil fuel subsidies are estimated at over $500 billion a year in direct support, and the International Monetary Fund indicates the number is closer to $5 trillion per year when indirect subsidies and the costs of environmental health impacts are included in the calculation. Renewable energy receives a tiny fraction of this amount of support in the form of tax incentives and power purchase agreements.

And with Canada and other G7 members committed to phase out fossil fuel subsidies by 2025, and to phase out fossil use completely by the end of the century, the investment case for renewables will only get better.

The U.S. and China are both betting on a renewable energy-powered future. China is now the largest solar project operator in the world, and the American Clean Power Plan is driving a transition of state energy systems towards clean energy. Canadian institutional investors should be embracing the challenges and opportunities associated with the transformation, not ignoring it.

A recently released report from the federal government think tank, Policy Horizons Canada, suggests that parts of the government are preparing for the future. According to the draft report, “the shift to an electricity dominated energy mix will be accelerated” as decreasing costs and technological innovation reinforce government policy action.

Another FT summit speaker, author Paul Gilding, was clear: “energy underpins the world economy, not fossil fuels.” Companies who do not recognize the change in energy markets that is underway will go the way of Eastman Kodak, Nokia, Peabody Energy, and other businesses that have failed to adapt to market transitions. The conference subtitle should motivate Canadian investors to act as the transition speeds up: “Surviving and Thriving in a Post COP World.”