The global economy of 2020 was primarily shaped by the coronavirus pandemic which greatly affected energy usage, project engagement and investments worldwide. Fortunately, 2021 signals some progression towards normality, and there are hopes that the energy market will follow suit with renewed conviction for renewables.
Perhaps one of the most prolific impacts on the energy market in 2020 was the plummeting demand for oil which reached a ground-breaking value of minus $37.63 a barrel. Traders were looking to offload barrels at a minus value in order to avoid massive storage costs in what was called “off-the-charts wacky” by Stewart Glickman, an energy equity analyst at CFRA Research. The drop in the oil market wasn’t reflected by growth in the renewables market either, with the IEA registering a 13% drop in renewable capacity compared to 2019, largely due to projects being put on hold and investment ceasing temporarily as the world got to grips with the pandemic and subsequent lockdowns.
As we look towards 2021, the key market buzzwords will perhaps include ‘bounce-back’ or ‘rebound’. Public and private investment into renewables has already begun to flow and most postponed projects look set to kick off in the near future.
With that in mind, here are some predictions for the 2021 renewables market:
8 out of 10 of the world’s largest economies have now committed to net zero emissions by 2050. The UK government published the Energy White Paper in December 2020, with a 10-point-plan for a ‘green industrial revolution’. The intent for renewable energy is alive and kicking.
Meanwhile, the IEA cites that renewables projects are beginning to get rolling again, particularly in China and the US. Compared to pre-pandemic forecasts, growth is still down 10%, but the projection is for a strong and immediate bounce back in renewables investment. A recent report by ReseachandMarkets.com stated that the global renewables market will grow from USD 184.3 Billion in 2020 to USD 226.1 Billion by 2021.
Solar and Wind Set to Dominate
Solar power is predicted to dominate the global market, with key stakeholders including SunPower (US), Canadian Solar (Canada), Jinko Solar (China), and Tina Solar (China).
Solar and wind power is set to lead the renewables market, but with a reinvigorated drive towards greater efficiency in production, innovation and storage. New pioneering offshore wind technology could increase by as much as 33% across the US and Europe and newly developed floating solar panels, “floatovoltaics,” could also start to surface throughout 2021.
Solar installations are also predicted to rise from 132GW in 2020 to 150GW in 2021.
The UK government itself is targeting up to 12GW of power in 2021, mainly accounted for by offshore wind power and solar power. The UK is aiming to create 40GW of offshore wind by 2030, as per the Energy White Paper.
Electric Cars Set to Break Records
Electric car ownership is still remarkably low, with less than 10 million electric vehicles on the roads globally and just 164,000 in the UK. However, this is all set to change in 2021, as sales are expected to increase by 60%, adding some 4.4 million electric vehicles onto the roads. This figure could snowball if commercial vehicle fleets and other large organisations commit their vehicles to electric in 2021.
Heating Networks and Heat Pumps to Rise
Heat pumps take air from outside, warm it up and pump it into houses – they’re cost-effective and efficient compared to conventional gas or electric heating. BNEF predicts sales of 12 million units globally in 2021, with Europe and the UK set to lead the way in sustainable heating.
Heat networks are another initiative where several buildings or blocks share the same heating sources. There are currently 17,000 heat networks in the UK and many more building developments are committing to them throughout 2021.
Oil to Re-Balance
The oil demand crisis instigated by the pandemic may not last much longer, with the BNEF predicting a re-balance in the global oil market in 2021. However, investment will likely continue to remain on hold as debts are repaid. The IEA instead predicts that oil prices will slowly decline through 2021, with some predictions showing a 1-2% decline on average each year through until 2050.
Fortunately for those who are eco-conscious, it looks like the march towards renewables is relentless and will continue throughout 2021. Solar and offshore wind are the dominant players in Europe, the UK and the USA at least.
As solar panels gain efficiency and battery technology grows in storage capacity and life-expectancy, solar panelling is set to play a key component of the UK’s Energy White Paper.
More and more businesses are committing to sustainability goals and solar panels are a vital tool enabling them to do this.
Commercial Solar Panels – Is your business energy efficient?’ – Mypower; https://www.mypoweruk.com/commercial/
Heat Networks in the UK – Association for Decentralised Energy; https://www.theade.co.uk/assets/docs/resources/Heat%20Networks%20in%20the%20UK_v5%20web%20single%20pages.pdf
US oil prices turn negative as demand dries up – BBC; https://www.bbc.co.uk/news/business-52350082
New Technology Keeps Solar On Track – Powermag; https://www.powermag.com/new-technology-keeps-solar-on-track/
Renewable Energy Market Update – IEA; https://www.iea.org/reports/renewable-energy-market-update/2020-and-2021-forecast-overview