Renewables comprised 26.2% of global electricity generation in 2018. This volume is expected to increase to 45% by 2040 due to the increased demand for low-emission production. [1]
By 2025, the global wind turbine market is expected to reach $123 billion compared to the evaluation at US$90 billion in 2019 [2]. The gradual growth is explained by the struggle of governments worldwide to reduce the carbon footprint that strongly impacts climate change.
Unfortunately, the COVID-19 pandemic changed everybody’s plans and set new trends for the renewables industry for the next few years. Despite negative forecasts, the renewable energy market started recovering in the second half of 2020 after a dramatic slowdown in the first half of that year.
Will things ever be the same? Let’s have a look at the post-pandemic changes that will shape the industry through 2022 and beyond.
Market boost after the COVID-19 pandemic
In early 2020, wind energy supply chains were massively disrupted by the all-around lockdown. Businesses had to shut down manufacturing, incurring missed deadlines and arrangements, and postpone their initiatives from 2020 to 2021 and 2022.
Leading renewable energy suppliers such as GE Renewable Energy, Vestas, and Siemens had to rearrange production to continue operating, but delays in supplies of turbines, blades, components, and materials. In general, it slowed down productivity until late 2020.
Despite the severe economic pullback, about 40% of all electricity in the EU was received from renewables compared to 34% of electricity from fossil fuels. [3]
In 2021, the wind turbine market growth will be fueled by the resumed projects and investment budgets accumulated through 2020. 2022 is expected to be even more flourishing after the market recovery and further expansion of wind and solar power installations on continents.
Going coal-free in the long run
The UK was coal-free for 67 days in 2020 [4]. For two months, the country utilized only the electricity produced by wind farms and renewable energy grids. This achievement made the UK’s 2020 the greenest year since the Industrial Revolution.
Britain’s next milestones are to phase out polluting fuels by 2025 and ban new gas-power cars by 2030 [5]. By that year, the UK will also spend 1 billion dollars on capturing carbon emissions from two industrial hubs.
The UK’s green industrial revolution is a hot topic in the media, so its experiment will soon be caught up in other regions of the world.
A while ago, China announced its plans to go carbon-neutral by 2060 [6]. The Republic will substitute electricity from fossil fuels with that produced by wind and solar power installations as part of its five-year national development plan.
On the other side of the world, the US is gradually increasing the share of renewable energy against traditional energy sources. The country counts on solar and wind power installations that are actively established in most US states.
“2020 was the year of positive surprises for the environment in a way that very few saw coming. It was the breakout year in sustainability and infrastructure.” [7]
Jeff McDermott, Head of Nomura Greentech
Onshore prevails over offshore
According to the International Renewable Energy Agency (IRENA), the capacity of onshore wind energy installations increased from 177,790 MW in 2010 to 594,253 MW in 2019. Within the same period, the capacity of offshore wind turbines has grown from 3,056 MW to 28,155 MW. [8]
The delivery of electricity from offshore wind turbines requires more complicated infrastructure at a higher expense on development and maintenance. Which, in its turn, results in a higher cost of electricity for a consumer.
At the moment, electricity produced with solar PVs and onshore wind turbines is sold at the cheapest cost out of all global renewables due to the wide popularity and high affordability of these two types of energy generation [9]. In addition to that, the growing popularity of small wind turbines such as from TUGE Energia, WindEnergy7, Enessere, Tbhawt Manufacturing, and others will further influence the decline in the energy cost.
There are many remote on-ground areas with high-speed winds that can be used for onshore wind turbine installation, whereas offshore wind turbines demand long-term site preparation, including research of the sea bed and complex foundation development.
Offshore wind generation is an extremely high-potential market; however, it will take more time to pay back than onshore wind turbines, especially after the pandemic. The industry expects forecast offshore energy to evolve in the next decade quickly.
Welcome Internet-of-Energy
Electric power supply systems are currently developed based on centric architecture. Besides known operational advantages, centricity can do a bad favor in the case of delayed price settlement or hub connectivity interruptions.
Internet-of-Energy has been designed as an instrument to mitigate settlement and connectivity issues.
Quick read: What is Internet of Energy (IoE)?
An IoE power system can involve diverse renewable energy generation grids connected into a network where energy providers, consumers, and investors can communicate via a single, decentralized blockchain-based platform. Using the platform, users can raise funds, own resources, and trade their energy avoiding the risk of fraud or energy loss.
An IoE system intelligently distributes rights between users, enabling them to buy and sell electricity directly from each other, skipping the multi-tier settlement that usually takes place in centralized systems. Platform users can set and change prices adherently to the relevant market situation.
Internet of Energy aims to simplify and improve energy distribution among market participants. Through delegated managerial control, the network lightweights its architecture resulting in higher efficiency.
“Distributed energy generation is the most fast-developing stream in the energy industry. IoE platforms are a convenient way to buy and sell electricity firsthand. I believe IoE will remain an excellent investment option with very promising profits.”
Nick Grebenkine, a private investor in wind energy
Hi-tech energy storage
The pandemic has demonstrated that force-majeure can happen for everyone in a moment. Besides closed borders, 2020 has brought several incidents of power outages in different regions of the world. These factors have brought energy startups to the idea of creating energy storage that will cumulate electricity and distribute it safely among consumers even during blackouts.
Intelligent energy storage will collect electricity from energy providers and keep it until distributed among consumers. By doing so, energy providers can stably deliver electricity on a known time under known circumstances at a known price, unlike centralized systems.
Next-level energy storage systems can offer individual storage space for buyers to stock it up for the future at the best price at the present time.
Energy storage can be especially helpful during peak load times or power outages. It can also be used as a trading platform for the users, where providers and buyers can exchange their resources storing electricity in the same location with minimum transmission expense.
A Swiss startup Energy Vault has developed storage to keep energy from renewable energy sources in pumped-storage plants that rely on gravity and the movement of water to generate power. Such a system can be used for long-term keeping at a low response time.
Looking forward
In a couple of decades, renewables are expected to be the main source of energy in most regions of the world. Blockchain, IoT, and distributed computing are being actively integrated into energy production, storage, and distribution.
With global digitization, more technologies will be adopted by the energy industry in the next few years, so leaders need to look at the latest trends not only in the renewable energy market but also at those in the IT software technologies.
References
- Renewable energy, C2ES
- Global Wind Turbine Market – Forecasts from 2020 to 2025
- Renewables beat fossil fuels, Ember
- 67 days coal free – a major milestone on the journey to a greener Britain
- UK plans to bring forward ban on fossil fuel vehicles to 2030, The Guardian
- How China could be carbon neutral by mid-century, Nature
- The 10 Ways Renewable Energy’s Boom Year Will Shape 2021, Bloomberg
- Outlook on the Wind Turbine Global Market to 2025, Businesswire
- Onshore wind and solar ‘cheapest’ form of energy for two-thirds of global population, Edie