With demand for fossil fuels predicted to peak by the end of the decade and the acceleration of renewable energy deployment, what are the leading Energy Transformation Technologies to watch in 2021?
Vital market dynamics are driving the acceleration of the energy transition. While energy usage may have decreased during the pandemic, according to Filippo Gaddo, Head of Energy Economics at Arup, electricity demand will rebound this year, despite the current lockdowns. A growing amount of this should be generated in a renewable way.
Renewable energy will continue to add more than 200 GW of capacity worldwide over 2021, with solar still including the most, but wind contributing to the most aggressive growth in electricity generated and investment. The cost would help push the virtuous cycle required to scale up renewable energy in an integrated manner. It is expected that the price of renewable energy will continue to fall. “Starting in 2021, we expect solar PV [photovoltaic] and onshore wind costs to fall by an additional 30 percent by 2030 and offshore wind by an additional 50 percent,” says Diego Díaz Pilas, Head of New Projects and Technology Prospects at Iberdrola.
The Transformation of the Renewable Energy Market in 2021: Key Developments and Industry Shift
The renewable energy market has an immense amount of creativity and investment. Cutting device costs, deepening the understanding of integrating energy sources, the role of renewable energy in overall sustainability, and, of course, hydrogen is the areas that draw the most excitement. Many of the developments and progress would influence each other, but the public and private sectors need the proper support and dedication.
Pieter Schaffels, head of global media relations at DNV GL – Energy, says: “We urgently need governments worldwide to commit to post-pandemic economic stimulus packages that will accelerate the adoption of low-carbon or zero-carbon solutions. From cheap renewable capital and energy storage projects to significant investment in power systems to allow renewables and energy integration.” Project delays due to supply chain instability and lender concerns are possibilities despite optimistic economic support signals from governments.
The mainstream oil industry also realizes that it has to plan for a changed future. Due to the market risk related to climate change, SP&P Global Ratings recently put oil firms, including Exxon Mobil and Royal Dutch Shell, on a negative watch. Tony Hodgson, Europe and Africa’s regional strategic sales manager at Fugro, predicts that a significant oil firm will change its business model to renewables in 2021.
The Tipping Point in Renewable Energy: Key Developments Shaping the Future of the Energy Market in 2021
He says: “Globally when it comes to renewable energy sources, we have now reached a tipping point.” With the rise in market demand, resisting green energy is futile and destructive business practice.
“Governments around the world have made significant commitments to sustainability and a green agenda this [past] year. As 2020 provided the impetus for a cultural reset, these policies will influence real-world practices in 2021.
In 2021, there are several fields of technology that will have a significant effect. Many of them are intertwined, and in the future, we will discuss all of them in greater depth. However, for the moment, these are the developments guiding the energy market’s transformation in 2021.
Solar Energy
IHS Markit has forecast that annual solar installations will rise by over 30% in 2021 after volatile demand in 2020. Experts have high hopes for perovskite, especially after recent efficiency breakthroughs. However, it may take some time before it is fully marketed. Floating solar growth is one to watch as it helps solar escape the debate on land/energy. Still, it is sectoral integration where it is likely to be the most significant focus, particularly concerning agrivoltaics.
The Wind
Turbine size will continue to expand, and floating wind will open up new regions (up to 10x current availability) for offshore growth, with the first commercial auction of floating capacity expected this year. The industry is investigating how to recycle blades. Sustainability will be a key priority. Orsted is running a consortium focused on recycling. The consortium will look at recycling through the supply chain.
Shell has just announced a majority stake in the Emerald floating wind project in the Celtic Sea. There is an awareness that offshore wind is a successful transition option for the oil and gas industry. According to IHS Markit, total offshore wind is set for another bumper year, almost doubling the deployed capacity to 10GW.
Storage
The demand is expected to be powered by dropping lithium battery prices, sectoral convergence (as with solar storage), green hydrogen development, and the continued roll-out of giga-factories. “Investment in large-scale battery storage sites will naturally follow in order to complement the growth in wind and solar energy production,” says Chris Holmes, co-lead investment advisor to the John Laing Environmental Fund. Storage will be transformative in value-stacking, where storage offers the opportunity to provide multiple energy resources simultaneously, from frequency control.
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Hydrogen
The hydrogen industry has gone through several cycles of popularity. However, many experts believe that this time will be different. They expect significant changes. Recent achievements in solar PV, wind, batteries, and electric vehicle adoption show that we are ready for the next level. This could include initiatives like the United Kingdom’s 10-point hydrogen plan.
Andreas Schierenbeck, CEO of Uniper, serves as a member of the newly created German National Hydrogen Council. He says, “Green hydrogen is the renewable energy source to watch in 2021.” He points out that the EU and many other countries are increasing their investments in the hydrogen sector. Green hydrogen plays a key role in speeding up decarbonization efforts. It is especially important in sectors where electrification isn’t feasible. These sectors include heavy industry, chemicals, and transport.
As part of the global energy mix, this would further embed hydrogen. There is a general feeling in the industry that the revival of interest in hydrogen feels different this time. The majority of hydrogen today focuses on fossil fuels. Amid the many green hydrogen announcements, we must beware of greenwashing.
Carbon storage
Carbon capture is vital to many proposals for a net-zero future, and governments are reviving construction plans.
The UK government includes CCS in its Green 10 Point Plan. It has set a target to run at least one CCUS (carbon capture, utilization, and storage) project by 2030. Elon Musk recently launched a $100 million competition. The competition aims to explore the best carbon capture technologies in the US.
The environmental community has pushed back against CCS. Most current CCS approaches have high energy and carbon penalties. These penalties come from building and implementing the technologies. Many believe that solutions based on design may be more successful. However, supporters argue that CCS/CCSU is essential for emissions-intensive industries. This includes industries like steel and cement. They believe CCS is the only way these industries can survive in a low-carbon future. There is strong potential for combining carbon storage with usage. This is something we will pursue in the future.
Digitalization
The need for adequate infrastructure development is essential to creating a robust, scalable, and sustainable grid. However, suppose the dream of smart, clean cities is to be realized. In that case, we need more efficient security systems, control, automation, and communication, not just to handle the grid itself but all the various devices connected to it.
There is a lot to play for a rise in digital twins’ use to model energy use and management. Brian Lynch from LG Solar expects growth in solar and energy storage systems (ESS). He predicts these systems will be linked by software. This will provide the right power at the right times, both in front of and behind the meter. Lynch believes technological breakthroughs will focus on quality. It will not be about the lowest cost. Vertical integration of technology stacks will play a key role. This includes ESS, software, and DERMs (distributed energy resource management systems). These advancements will lead to baseload power and dispatchable solar power.
Artificial Intelligence
As the grid gets more competent, the need for AI solutions to handle operations’ complexity will increase. This will encourage greener processes to incorporate predictive solar and wind array maintenance. It could also play an essential role in the corporate energy market, helping businesses minimize their energy usage and even encourage emissions reductions by managing a dynamic network of energy sources. This will help not only intelligent cost control but also the carbon profile of energy sources as well.
“Ron Beck, Director of Energy Industry at AspenTech, says he expects to see AI in the next 12 months. Compensate for capability shortages, allow safe and efficient operations in the face of increased technological complexity, and learn from asset data to accelerate the maturity of new energy technology.
