Posted on 7th January 2021 in the categories: Renewable

Energy Market Trends to Watch in 2021

Energy Market Trends to Watch in 2021

We have come to the end of what has been a difficult year, with COVID-19 disrupting lives and economies across the globe. Like many, the energy market was significantly affected by the pandemic, with disruptions likely to continue.

Coronavirus has made the future of renewable energy markets even more uncertain. For instance, the renewables industry faced projects, production, and installations being put on hold.

With that, what can we expect in 2021? We have compiled a list of the top renewable trends to watch for in 2021, based on research by the Energy Information Administration (EIA) and the International Energy Agency (IEA).

Factors effecting energy and its demand

There are a range of variables that will affect the energy market in the coming year:

  • Pandemic control measures, e.g., lockdowns, and how much they prolong working from home, online shopping, and other “new normal” behaviours
  • Effects of government incentive plans
  • Shifts in travel
  • Fuel prices
  • The speed of economic recovery
  • Electric power system operations, e.g., changes in timing, demand, and rates

Renewable energy trends

Despite the global pandemic, our climate continues to change, and the need for clean energy sources remains high. Therefore, the top trends for 2021 include:

  1. Expect green hydrogen to grow

Green hydrogen has long been acknowledged as one of the keys to significantly reducing global CO2 emissions. As the price of renewable electricity continues to fall, industry experts expect to see green hydrogen become cost competitive and play an even greater role in our energy industry.

  1. Renewables will rebound

Many renewable energy projects, such as solar and wind, that were postponed by the pandemic are expected to come online in 2021 and lead to a rebound in renewable energy capacity. As a result, it is expected 2021 capacity levels will come close to those of 2019, prior to the pandemic. However, the collective renewables growth of 2020 and 2021 will be approximately be 10% less than the IEA had previously forecast. Additionally, the commissioning of two enormous hydropower projects in China in 2021 drives the overall rebound of renewables.

  1. Transport biofuel set to follow diesel trends

Understandably, Covid-19 has had a major impact on the global biofuels market as lockdown measures reduced economic activity and the need for transport fuel. As demand for diesel falls, biofuel consumption falls as well. The reason for this is that many policies require a predetermined amount of biofuel to be combined with gas and diesel. If coronavirus cases fall and lockdown measures are rescinded worldwide, biofuel will recover alongside its fossil fuel counterparts.

Key Takeaway

Clearly, it will be a long road back to ‘normal’ for many energy sources. In The Meantime, we can expect to see greater energy use and CO2 emissions as countries around the globe develop and gain access to new technologies.

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