Deloitte Predicts 5 Renewable Energy Trends to Watch

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Despite the pandemic and an economic recession, businesses and governments continued to pursue their decarbonization plans in 2020, according to Deloitte. Even without a direct incentive for green infrastructure development in the economic stimulus measures passed in response to COVID-19, clean energy demand in the US proved resilient, as renewables and storage recorded declining costs and rising capacity and usage factors.

Deloitte’s Renewable Energy Industry Outlook indicates that renewables edged out other electricity generation sources when electric demand fell this year (the US Energy Information Administration estimates that electricity consumption will likely fall by 3.9% year over year in 2020). Renewable growth is expected to rise in 2021 as the new administration starts to execute a platform that includes rejoining the Paris Climate Accord, investing $2 trillion in clean energy, and fully decarbonizing the power sector by 2035, according to the outlook.

Deloitte predicts five trends to watch over the coming year:

• Deal activity will rise across the value chain as companies, governments and utilities prepare to meet ambitious climate targets;
• As renewable penetration on the grid increases, green hydrogen development is expected to follow because of its potential to act as seasonal storage of fuel available on demand to generate power for grid balancing;
• Energy storage is becoming one of the fastest-growing asset classes in the energy industry. Falling costs and maturing technology are making use cases for storage more economical, which could enable storage to provide multiple functions, from ancillary grid services to on-demand power;
• Wind industry’s frontiers are expected to increasingly move offshore in 2021. As utilities focus on decarbonization and create net-zero targets, offshore wind holds great promise for many thanks to its high capacity factors and deployment potential;
• Supply chain strategies will shift as US policy and regulations move to safeguard technology and data from cyberattacks and as a national imperative to reduce US dependence on other countries for materials and products becomes more prevalent.

The potential for increasing renewable energy demand, as well as the electrification of the transportation and industrial sectors and oil and gas companies’ plans to increase participation in the electricity value chain, are accelerating energy industry convergence, according to the report. These trends may foster collaboration that gives rise to new business models and helps advance the energy transition.