This is the time to sweep 2020 out the door and welcome 2021. In keeping with tradition, we wanted to share some of the predictions that have come across our desk over the past few weeks and leave you with some predictive titbits to chew on as we head into the new year.
Renewable energy’s transformative role to continue unabated
According to Goldman Sachs, renewable power will account for the largest amount of energy sector spending in 2021. This is particularly due to the hurdle rates (weighted cost of capital) for renewable energy (3-5%) vs that of fossil fuels (10-20%). We will likely see a number of the oil and gas majors continue their shift into other business areas, including renewable energy and electric vehicles, similar to that set out in BPs ‘Green Growth’ strategy which targets net zero emissions by 2050.
As a result – flexibility will become increasingly important…
Says Simon Egan, Managing Director UK, Ireland and the Netherlands, Landis+Gyr: “Even as we emerge from the pandemic, there is no doubt that flexible working patterns will continue as “the new normal”. This major shift in energy consumption habits and blurring of the lines between peak and off-peak has demonstrated the need for flexible and intelligent power distribution. This is only made possible through a truly smart grid that can manage demand-side fluctuations whilst accommodating increasing renewable generation.”
Because we will not only need to balance the integration of renewable energy into the grid – but also the increased integration of electric vehicles…
Many countries across the world are committing to reduce or ban the sales of new diesel and petrol cars by 2030, according to Nick Merricks, Head of UK Electricity Product Management, Landis+Gyr. As a result, calls for more regulatory support and infrastructure to facilitate the wider adoption of EVs will only get louder.
What role will smart meters pay in the EV charging landscape as consumers try to balance charging with low tariffs and how will utilities utilise the same for balancing the load on the grid as more renewable energies are added?
Says Merrick: “With innovative trials such as the SmartSTEP project already underway, we will see further cross-sector collaborations in 2021 to bring EVs to the masses through increased accessibility and affordability.”
And of course, technology will continue to underpin and support the energy transition.
Decarbonisation is a fundamental part of the transition, and in Fit For Net Zero: 55 Tech Quests to accelerate Europe’s recovery and pave the way to climate neutrality, Capgemini explore some of the technologies that will power this decarbonisation. These were roughly grouped under the heading: From Fossil to Clean: Volumes and costs; Solved intermittency and availability; and finally, Optimise and redesign grids. Specific innovations include improving the efficiency of solar panels, storage and the deployment of heating and cooling at scale.
Says Chris Kimmett, Director of Power Grids, Reactive Technologies: “Our recent contract with National Grid ESO to build an ultracapacitor which will measure grid data in real-time is just one example of how grid operators can utilise technology solutions to help achieve their clean energy targets.”
What are the ‘out there’ predictions that will cause you to pause?
Every year Saxo Bank releases a number of outrageous predictions. These focus on “unlikely but underappreciated events which, if they were to occur, could send shockwaves across financial markets.” 2020 predictions included South Africa electrocuted by ESKOM debt and In energy, green is not the new black
Outrageous prediction number 1:
Blockchain changes the game: With disinformation on the rise and an increasing lack of media credibility major media companies develop a massive shared blockchain network that will allow the distribution of news in an immutable way with verification of the validity of the content and the source.
Outrageous prediction number 2:
The super non-linear complexities of plasma physics is solved, allowing commercial fusion energy to become a reality. With a bit of tweaking, the MIT Sparc fusion reactor means “the prospect of a world no longer held back by water or food scarcity, thanks to desalination and vertical farming.” Energy and food independence are a reality and ‘hey presto!’ living standards are rapidly improved around the world.
Do you have any outrageous predictions you’d like to share with us? Or some of the more ‘likely to happen’ type? We’d love to hear from you as we say a very hearty and well deserved GOODBYE to 2020 and welcome what will hopefully be a healthier, happier and financially more secure 2021.
Until next year!